To hear some talk about Honeywell (NYSE:HON),
you'd think this is a lousy business, never mind the solid margins and
returns on capital. There are nits to pick with respect to organic
revenue growth and free cash flow generation, I'll grant, but it's
interesting to me to see what companies get a "pass" and what companies
don't. Now with a new CEO in place, one who hasn't earned the benefit of
the doubt from investors and analysts, there could be more pressure on
Honeywell to remake the business in a more dramatic fashion.
I
don't know whether or not Honeywell will restructure itself in a major
way, up to and including separating from the aerospace business, but
management has at least validated it as a talking point in response to a
letter from an activist investor. Relative to my cash flow
expectations, Honeywell shares are trading at an implied return in that
space between "mid" and "high" single digits, which isn't bad, and could
still offer some upside as comps get easier and the company considers
its strategic options.
Read more here:
Honeywell Has Several Options To Go From Very Good To Great
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