Whatever may be the apple of Wall Street’s eye today, it’s a safe bet that the clock is ticking on how much time is left before it's relegated to apple sauce in the cafeteria. That would seem to fit the recent performance of Honeywell (HON), as what was one of the more popular large multi-industrials earlier in the cycle has underperformed the space by about 10% since my last update and now sports quite a few more “hold/neutral” ratings than before. I understand this … to a point. Honeywell benefited from a run back to names leveraged to aerospace and process automation, as well as warehouse automation and building controls, and there were expectations of more capital deployment. Now, though, the aero and process cycles are known entities and the Street is looking for names with more near-term sizzle.
Valuation is still a concern; while Honeywell’s valuation has shrunk more than its sector, sector valuations are still above long-term averages and I am concerned that there could be further contraction. I’m not worried about the quality, though, and this is a name to consider if this slide continues.
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Honeywell Underperforming As Wall Street Once Again Shows It Will Eat Its Darlings
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