We upgraded our rating from Neutral to Outperform on Honeywell International (HON) with a target price of $62.00. The company delivered impressive third-quarter 2011 results as its performance gained momentum in all business segments. The robust third-quarter performance and improving market condition led the company to increase its 2011 guidance.
Sales in all segments witnessed positive growth. The company’s revenue increased in all regions, with strong growth in the emerging markets. Honeywell’s short-cycle businesses, as well as its commercial aerospace spares and residential and commercial retrofit businesses, are performing impressively well and are expected to support the company’s future growth outlook.
Our long-term Outperform recommendation on the stock indicates that it will outperform the broader U.S. equity market over the next six to twelve months. Our target price is $62.00 or 14.0x 2012 EPS, which is well within the historical range.
