Why Honeywell International Inc. (HON) Could Beat Earnings Estimates Again

Looking for a stock that has consistently beaten earnings estimates and could be well-positioned to continue its streak into its next quarterly report? Honeywell International Inc. (HON), a member of the Zacks Diversified Operations industry, could be a great candidate to consider.

Looking at the last two reports, this company has had a strong streak of beating earnings estimates. The company has beaten estimates by an average of 4.23% over the last two quarters.

For the last quarter, Honeywell International Inc. was expected to post earnings of $1.93 per share but instead the company reported $2.07 per share, delivering a surprise of 7.25%. For the previous quarter, the consensus estimate was $2.49 per share when the company actually generated $2.52 per share, delivering a surprise of 1.20%.

Considering its earnings history, the latest estimates for Honeywell International Inc. have been getting higher. The Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign that the company’s earnings have beaten expectations, especially when combined with its high Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat consensus estimates could be as many as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a revision of the Zacks Consensus definition that is related to revision. The idea is that analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other contributors to the consensus had previously predicted.

Honeywell International Inc. currently has an Earnings ESP of +1.82%, suggesting that analysts have recently become bullish on the company’s earnings prospects. This positive Earnings ESP, combined with the stock’s Zacks Rank #2 (Buy), indicates that another beat is likely just around the corner. We expect the company’s next earnings report to be released on July 27, 2023.

In the case of the Earnings ESP indicator, it is important to remember that a negative value reduces its predictive power; however, a negative Earnings ESP value does not mean that profits have not been achieved.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock growth. On the other hand, some stocks can maintain their position even if they end up missing consensus estimates.

For this reason, it is very important to check a company’s Earnings ESP before its quarterly release to increase your chances of success. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they are released.

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