Wells Fargo initiates Honeywell stock coverage at Equal Weight on margin concerns
Wells Fargo has initiated coverage on Honeywell International with an Equal Weight rating and a price target of $231.00. The target is close to InvestingPro’s Fair Value of $233.52, indicating the stock is currently undervalued at $211.79. Honeywell’s P/E ratio of 8.18 suggests the company is attractively valued compared to its industrial conglomerate peers.
The report highlights Honeywell’s strong growth prospects as the simplified company holds leading technology across mostly attractive end markets. However, high margins and limited balance sheet flexibility in the short term restrict upside potential. Strong demand momentum supports the company’s 4-6% growth forecast, with organic orders up 16% in Q2, backlog increasing 9%, and continued momentum into the first two months of Q3.
The favorable backdrop, combined with pricing, supports growth near the upper end of the 4-6% growth framework. Over the past year, the company achieved 11% revenue growth, showcasing robust execution. Investors subscribing to InvestingPro gain access to additional insights, such as the company’s 15-year dividend growth streak and comprehensive Pro Research Reports on over 1,400 US stocks.
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