Guidance Adjustments From Honeywell Reinforce Concerns At Credit Suisse

Credit Suisse said in a note on Friday that
Honeywell International Inc.
(NYSE:
HON
) faces concerns regarding under-investment. Additionally, the firm is of the view that its aerospace multiple may recouple with pure-play aerospace companies, which had de-rated this year due to soft demand outlook.

Guidance Lowered

Related Link: Industrial Conglomerate Stocks Under Pressure Amid Light Guidance From Honeywell

Growth Prospects Hurting?

Credit Suisse expressed concerns about the company's inability to meet sales forecast, which is currently being offset by additional restructuring and headcount reductions. The firm believes the earnings outperformance despite the sales shortfall may have come at the expense of future growth.

Discount In Valuation Closing In

The firm believes the company is losing share in aerospace, with organic sales growth at this segment now about 1 percent compared to peer group growth of 4+ percent. The firm is of the view that the disconnect between aerospace pure plays, which had de-rated, and other companies with large aerospace exposure, which had seen their valuation multiple re-rate, would begin to close.

Credit Suisse has a Neutral rating on the shares of the company.

At time of writing, Honeywell shares were down 7.72 percent at $106.69.

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