RTX - Honeywell In Recovery Mode But Valuation Is Tough

• Honeywell posted better revenue and segment profits for the fourth quarter, and guidance for 2021 was consistent with the recovery story.
• Near-term Aero results are more tied to improving air traffic levels (aftermarket), but new-builds should start recovering in 2021 and into 2022.
• Demand for logistics/warehouse automation remains very strong, and Honeywell is enhancing its process automation opportunities, but exposure to refining and oil/gas remains a headwind.
• I think Honeywell is a top-tier industrial company with strong long-term growth potential (7% FCF growth), but the valuation more than captures that potential.

For further details see: