Honeywell Augments Metals Capacity – Analyst Blog

Honeywell International (HON) is augmenting its production capacity for 300mm sputtering targets and related metals in a bid to cash-in on the fortunes of a reviving semiconductor market.

Honeywell is increasing targets output capacity, as well as internal capacity to make available copper, cobalt, titanium, and tungsten- the raw materials required for making the targets. In addition to manufacturing sputtering targets, Honeywell is vertically integrated in supplying source materials required for the semiconductor industry.

The semiconductor industry has seen a reversal in fortunes from a significant downturn and is expected to deliver more than 25% growth by the end of the current calendar year.

Honeywell is a leading supplier of electronics, consumable hardware, engine controls, environmental controls, landing systems, power systems, propulsion engines, aerospace services and space products and systems for the aerospace industry, including commercial and regional airlines, air cargo carriers, as well as Original Equipment Manufacturers (OEMs) of commercial, regional, military aircraft and spacecraft.

Honeywell’s attractive collection of businesses has the potential to earn consistent above-average returns. The company’s focus on working capital management, free cash flow generation and balance sheet strength remain positive attributes in the current weak environment.

The company is a global leader in refrigerants, aerosols and foam-insulation blowing agents used to replace ozone-depleting Chlorofluorocarbon and Hydro chlorofluorocarbons. Those same products also improve the energy efficiency of homes, appliances and commercial refrigeration systems.

The company’s proactive restructuring initiatives have positioned it to navigate better than many of its peers, but we have yet to see signs of stabilization in a number of its major end markets.

Honeywell is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.

We currently have a Neutral recommendation on Honeywell.