NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and disappointing return on equity.
Highlights from the ratings report include:
- HON's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,477.00 million or 41.33% when compared to the same quarter last year. In addition, HONEYWELL INTERNATIONAL INC has also modestly surpassed the industry average cash flow growth rate of 41.33%.
- The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.89 is somewhat weak and could be cause for future problems.
- The gross profit margin for HONEYWELL INTERNATIONAL INC is currently extremely low, coming in at 13.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.30% is significantly below that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Aerospace & Defense industry. The net income has significantly decreased by 184.0% when compared to the same quarter one year ago, falling from $369.00 million to -$310.00 million.
Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. The company has a P/E ratio of 13.6, below the average aerospace/defense industry P/E ratio of 15 and below the S&P 500 P/E ratio of 17.7. Honeywell International has a market cap of $44.58 billion and is part of the
industry. Shares are up 7.2% year to date as of the close of trading on Monday.
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