Friday, 16 October 2015

One chart from Honeywell's presentation deck that really makes you think

It is funny how what goes around comes around again. I noted three months ago on another day (like today - link here) where I was blown away by the quarterly update from General Electric that Honeywell:

'...is a quality performer however.  Any break towards a single digit EV/ebit FY15e metric (getting near Euro95) is a real opportunity and frankly if you made some half-reasonable assumptions about 2016 you may even make the shares work for you near prevailing'.  

The shares have shown some support at around that level at times of market extremity during the last couple of months:

This level still broadly stacks up from a quantitative metric perspective as numbers were reiterated during today's Q3 report: 

Management were reasonably upbeat on the call and it was notably that quite a few analysts congratulated them on the quarter (perhaps saying something about other industrial/related numbers so far during this quarterly earnings period!)  The graphic which struck me however was this one which indicates some initial 2016 thoughts...which are predominately amazingly neutral across the range of Honeywell's businesses:

Goes to show once again that industrial companies have to make their own luck in the current environment - and that predominately means a laser-like focus on costs and structure.  It is for these rationales why I still prefer GE shares as prevailing as detailed at the above link.  

The Honeywell presentation deck graphic above however really does resonate re the reality of the industrial world today.  

No comments:

Post a Comment