With earnings season around the corner, investors are expecting aerospace-focused technology and manufacturing conglomerate Honeywell International Inc. (NYSE: HON) to deliver market-topping third-quarter results. Although Honeywell's new CEO Darius Adamczyk has been criticized for being too conservative on earnings guidance, Wall Street analysts anticipate $1.73 earnings per share, up 3.59%, from $1.67 in the same period last year. Honeywell's short-cycle business within the home and building technologies (HBT), safety and productivity solutions (SPS) and performance materials and technologies (PMT) segments, which together make 60% of its total revenue, continue to remain on a growth trajectory amid challenging macroeconomic environment.
Honeywell's highly diversified business portfolio has strong potential to generate consistent above-average returns and mitigate operational risks. In addition to this, the company's diligent focus on working capital management, free cash flow generation and a conservative balance sheet bodes well for investors. Year-to-date, Honeywell has generated an average market return of 23.62% (see chart below), outperforming its industry peers General Electric Co. (NYSE: GE), United Technologies Corporation (NYSE: UTX), Johnson Controls International (NYSE: JCI), BASF SE (OTCMKTS: BASFY) and even the S&P 500 (NYSEARCA: SPY) index. Today, Honeywell's stock reached all-time high of $143.92 with a market capitalization of $109.46bn and still has a price target of $153.84. If the $153.84 price target is achieved, the company will be worth $8.67bn more.