Honeywell International Soaring As Millions More Middle Classers Fly On Its Airplanes

As more people around the world enter the middle class, more are able to purchase plane tickets—which means more demand for airplanes. Which is boding particularly well for Honeywell International under CEO Darius Adamczyk.

The industrial conglomerate’s stock keeps making new 52-week highs, reaching $177.36 on June 20, based in part of analysts’ recommendations upon hearing about Honeywell’s bullish predictions at a Paris air show earlier that week. The Morris Plains, New Jersey-based company said it is seeing broad-based aftermarket demand, and its aerospace orders with delivery this year are up 23% from a year ago.

Afterward, Barclays analyst Julian Mitchell wrote that Honeywell was his “top pick” within his multi-industry industrial coverage and rated the compan’s shares as “outperform.”

“The commercial aerospace business is growing because, essentially, there are more people on planes,” Barron’s wrote. “A growing global middle class means customers all over the world can afford to fly more. The International Air Transport Association reports that global passenger miles flown have grown about 6% a year on average for the past 10 years.”

Honeywell earned $1.92 a share in the first quarter, easily surpassing the consensus estimate of $1.83, while it beat the consensus revenue estimate by 3.06%, according to Zacks Equity Research.

“What’s driving the outperformance? The stock has an impressive record of positive earnings surprises, as it hasn’t missed our earnings consensus estimate in any of the last four quarters,” Zacks wrote.

For the current fiscal year, Honeywell is expected to post earnings of $8.1 per share on $37.17 billion in revenues — a 1.12% change in EPS on a -11.08% change in revenues, according to Zacks. For the next fiscal year, the company is expected to earn $8.83 per share on $38.96 billion in revenues — a year-over-year change of 9% and 4.82%, respectively.

“Honeywell is a simpler, more focused company that continues to overdeliver on its commitments,” Adamczyk said in the company’s earnings call in April.

“We are encouraged by our results, particularly organic sales growth and free cash flow, which were two of my top priorities when I took over as CEO,” he said. “Our combination of strong sales growth, favorable end-market exposure and significant balance sheet positions us well for the remainder of 2019.”

In 2017, Darius Adamczyk became Honeywell’s CEO, previously serving as chief operating officer. Prior to this role, he served as CEO of Honeywell Performance Materials and Technologies, whose products include low global warming refrigerants, specialty films for healthcare and photovoltaic applications, technologies for the global refining and petrochemicals industry and process solutions. Adamczyk also served as president of Honeywell Process Solutions, was incorporated into Honeywell PMT under his leadership.

Adamczyk became the president of Honeywell Scanning & Mobility in 2008 when Metrologic—where he was serving as CEO—was acquired by Honeywell.

 

He’s No. 72 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies

Headquarters: Morris Plains, New Jersey

Age: 53

Education:MBA from Harvard University, a master’s degree in computer engineering from Syracuse University, and a bachelor’s degree in electrical and computer engineering from Michigan State University.

First joined company: 2008

Prior to joining Honeywell: Metrologic

Named CEO: 2017