Honeywell Tempers 2014 Sales Guidance, Provides 2015 Forecast

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At the end of its third fiscal quarter, Honeywell International Inc. (NYSE: HON) raised its full year 2014 earnings per share (EPS) guidance to a range of $5.50 to $5.55 and its revenue guidance to a new range of $40.3 billion to $40.4 billion. Monday morning, the conglomerate affirmed its EPS guidance and lowered its sales guidance to a new range of $40.1 billion to $40.2 billion, and it released fiscal year 2015 guidance as well.

Honeywell has forecast 2015 EPS at $5.95 to $6.15, compared with an analysts’ consensus estimate of $6.11. The company’s revenue forecast rose just 1% to 2%, to a range of $40.5 billion to $41.1 billion. The consensus estimate calls for revenues of $41.92 billion in 2015.

The company’s run has been very strong over the past two years. The stock price is up more than 55%, but most of that growth came in the 12 months ending in December of last year. So far this year, shares are up just 5%.

The company’s CEO said:

While we’re expecting only modest GDP growth in most regions around the world next year and will accordingly continue to be conservative in our cost and resource planning, our plan is to deliver higher organic growth, strong margin expansion, and double-digit earnings growth once again in 2015.

In that vein, Honeywell projects a jump of 8% to 10% in free cash flow, to $4.2 billion to $4.3 billion for the year, up from approximately $3.9 billion this year. Operating margin is forecast to rise to 16.7% to 17.0%, up 160 to 190 basis points compared with this year.

In late November Honeywell’s stock was upgraded to Outperform at RBC Capital Markets. Of 17 ratings on the stock, 11 are Strong Buy, two are Buy and four are Hold. The consensus price target on the stock is around $109.00.

Shares were up about 1.2% in Monday’s premarket trading, at $97.00 in a 52-week range of $82.89 to $100.16.

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