Should You Buy Honeywell Stock after Q1 Report?

Honeywell (HON) reported Q1 2022 results that compared favorably with the consensus estimates. The company also raised its sales and profit expectations for full-year 2022. North Carolina-based Honeywell provides a range of technology solutions to a variety of industries, including aerospace, automotive, and construction. 

Q1 Numbers at a Glance

Revenue of $8.4 billion dipped 1% year-over-year but exceeded the consensus estimate of $8.3 billion. Adjusted EPS of $1.91 slid from $1.92 in the same quarter the previous year but beat the consensus estimate of $1.86. Honeywell’s results were adversely impacted by the company’s decision to suspend operations in Russia. For example, the company attributed about $30 million in lost sales to its Russian exit. Honeywell also faced supply chain challenges during the quarter.

2022 Guidance

For full-year 2022, Honeywell expects revenue in the band of $35.5 billion to $36.4 billion. It raised the lower end of the guidance from $35.4 billion in the previous estimate. Wall Street consensus calls for revenue of $36 billion and adjusted EPS in the range of $8.50 to $8.80, marking a boost from the previous EPS guidance range of $8.40 to $8.70. The consensus estimate calls for EPS of $8.60.

The EPS estimate boost reflects the expected impact of Honeywell’s updated share repurchase program. The company hopes to repurchase $4 billion worth of shares in 2022.

CEO Darius Adamczyk commented, “As we look toward the rest of 2022, we are well positioned to navigate the macroeconomic environment and remain confident in our ability to execute on our rigorous operating principles and deliver strong results.” 

Wall Street’s Take

On April 29, Cowen & Co. analyst Gautam Khanna maintained a Buy rating on Honeywell with a price target of $230, which indicates 18.9% upside potential. 

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on eight Buys versus six Holds. The average Honeywell price forecast of $221.36 implies 14.3% upside potential to current levels. Shares have declined 11.7% over the past year.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 84% Bullish on HON, compared to a sector average of 68%.

Key Takeaways

Honeywell has shown encouraging resilience in the face of the macroeconomic headwinds to deliver Wall Street-beating results. Strong demand, which saw orders jump 13% year-over-year at the end of Q1, and a solid balance sheet, which continues to support strategic investments, dividends, and share repurchases, indicate a brighter future for Honeywell.

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