Some Expectations For Honeywell's Incoming CEO Darius Adamczyk

Barclays’ Scott R. Davis believes that Honeywell International Inc.’s HON new CEO, Darius Adamczyk, is inheriting a company that is “culturally and physically in great shape for a management transition.”

Davis maintained an Overweight rating on the company, with a price target of $128.

Shareholder Angst

With the highly regarded and long-time CEO, Dave Cote, stepping down in six months, and with Honeywell struggling with its earnings results for most of 2016, the analyst mentioned that there has been “an expectedly high level of shareholder angst.”

Although the current stock valuation implies that Adamczyk is not expected to drive improvements at Honeywell, the analyst believes there could be multiple expansion once investors are more comfortable with the new CEO, as well as with the company’s people and processes being able to sustain themselves.

Positive Expectations

With regard to physical assets, the company has been making higher investments than its peers, has good relationships with its customers and Davis believes Honeywell is well positioned in its key growth markets.

“Incoming CEO Darius could misfire on a deal or mis-execute operationally, of course, and recent quarterly results have been sloppy. However, we think it would be very difficult to stop the progress/momentum that has been made,” the analyst mentioned.

Also, Davis believes the new CEO might be better able to deal with some aspects that Cote failed at, such as above market core growth or a more fully utilized balance sheet.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!