There's an ongoing tug of war in the industrial sector
between analysts and investors who believe the end is nigh and that the
cycle is going to start showing real signs of slowing next year, and the
people who actually run those companies who believe business conditions
remain strong. While many short-cycle industrials have picked up a
little momentum lately, longer-cycle Honeywell (HON) has remained a strong performer throughout, with the shares arguably replacing 3M (MMM) as the must-own in the space.
In
relatively short order, Honeywell will become a smaller, more
profitable, and faster growing company as it completes the spinoffs of Garrett Motion (GTX) and Resideo Technologies.
Spinning these two businesses should, in turn, lead to higher multiples
for Honeywell as it will improve the company's margins, returns, and
growth prospects. As all of that is going on, Honeywell continues to
enjoy healthy demand across many of its businesses, with certain
categories (aerospace, UOP, and automation in particular) looking like
they have more to give. I've been a steady fan of Honeywell for a while,
but given where the shares now sit in terms of valuation, I can't be
quite as enthusiastic as before.
Follow this link to the full article:
More Clarity On Honeywell's Spinoffs And A Boost To Guidance
No comments:
Post a Comment