Is Honeywell International Stock Underperforming the Dow?

Charlotte, North Carolina-based Honeywell International Inc. (HON) engages in the industrial automation, building automation, and energy and sustainability solutions businesses in the United States and internationally. The company has a market cap of $68.9 billion and provides automation control and instrumentation products and services, smart energy products and sensing technologies, including custom-engineered sensors and related services, among others. 

Companies with a market cap of $10 billion or more are typically referred to as “large-cap stocks.” ETN fits squarely into that category, with its market cap exceeding this threshold and reflecting its substantial size and influence in the conglomerates industry.  

However, HON stock is down 18.3% from its 52-week high of $261.24 touched on March 2. Moreover, HON has declined 14.7% over the past three months and has underperformed the Dow Jones Industrial Average ($DOWI), which rose 4.2% during the same period.   

Zooming out a little further, the scenario remains the same. Over the past 52 weeks, HON has fallen 2.9%, underperforming DOWI’s 17.4% gain.       

HON has been trading below its 200-day and 50-day moving averages since August, showcasing short-term bearish momentum.

On June 29, HON announced the completion of the spin-off of its Aerospace Technologies business and a new ticker for the spin-off company, which would trade on NASDAQ under the ticker HONA. The newly introduced Honeywell Aerospace will continue providing the aerospace solutions HON was known for, just under a different wing and with its own market identity. HON also raised its adjusted EPS target to $7.90 to $8.30, post-split, for the full year. However, the market did not react positively to the split, leading to a loss in investor confidence and ultimately a 6.8% decline in its stock value that day. 

When stacked against its peer, 3M Company (MMM), HON has also underperformed. Over the past year, MMM stock has grown 9.1%.    

Moreover, sentiment on HON remains moderately optimistic. Among the 23 analysts covering the stock, the consensus rating is a “Moderate Buy.” Its mean price target of $265.76 suggests a 24.5% upside from current levels.