Honeywell's Financial Targets in Line With Expectations, RBC Capital Markets Says
Honeywell International's (HON) three-year financial goals are mostly in line with expectations, including 4% to 6% organic growth, about 400 basis points of margin expansion, and more than 10% of earnings per share growth, RBC Capital Markets said in a note Friday.The company's "margin expansion looks largely de-risked through structural actions" and Honeywell Chief Financial Officer Mike Stepniak described the about $6 EPS goal as "table stakes" with growth front-loaded," RBC said.The investment firm highlighted the 2 percentage points growth contingency embedded across the targets, leaving room for potential upside.Management has made a "compelling" case for hitting or exceeding its targets based on factors like accelerating services and software mix, and growth in software annual recurring revenue, according to the note.The investment firm said it likes Honeywell's setup ahead of the June 29 spin-off of its Aerospace division.RBC has an outperform rating on Honeywell and $275 price target.Shares of Honeywell were up more than 2% in Friday trading.Price: $224.04, Change: $+4.91, Percent Change: +2.24%