Intrinsic value of Honeywell International Inc. - HON

Previous Close

$165.03

  Intrinsic Value

$123.23

stock screener

  Rating & Target

sell

-25%

Previous close

$165.03

 
Intrinsic value

$123.23

 
Up/down potential

-25%

 
Rating

sell

We calculate the intrinsic value of HON stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 120.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  42,638
  43,619
  44,740
  45,998
  47,393
  48,923
  50,589
  52,393
  54,336
  56,421
  58,652
  61,032
  63,567
  66,260
  69,118
  72,147
  75,354
  78,744
  82,327
  86,110
  90,101
  94,311
  98,747
  103,422
  108,346
  113,530
  118,986
  124,728
  130,769
  137,122
Variable operating expenses, $m
  29,082
  29,706
  30,419
  31,219
  32,106
  33,079
  34,139
  35,285
  36,521
  37,847
  37,297
  38,811
  40,423
  42,135
  43,953
  45,879
  47,918
  50,074
  52,353
  54,758
  57,296
  59,973
  62,794
  65,767
  68,898
  72,195
  75,664
  79,316
  83,157
  87,197
Fixed operating expenses, $m
  6,839
  6,990
  7,143
  7,301
  7,461
  7,625
  7,793
  7,965
  8,140
  8,319
  8,502
  8,689
  8,880
  9,075
  9,275
  9,479
  9,688
  9,901
  10,119
  10,341
  10,569
  10,801
  11,039
  11,282
  11,530
  11,784
  12,043
  12,308
  12,579
  12,855
Total operating expenses, $m
  35,921
  36,696
  37,562
  38,520
  39,567
  40,704
  41,932
  43,250
  44,661
  46,166
  45,799
  47,500
  49,303
  51,210
  53,228
  55,358
  57,606
  59,975
  62,472
  65,099
  67,865
  70,774
  73,833
  77,049
  80,428
  83,979
  87,707
  91,624
  95,736
  100,052
Operating income, $m
  6,716
  6,923
  7,177
  7,478
  7,826
  8,218
  8,657
  9,143
  9,675
  10,255
  12,853
  13,532
  14,264
  15,049
  15,890
  16,789
  17,748
  18,769
  19,856
  21,011
  22,236
  23,536
  24,914
  26,373
  27,918
  29,552
  31,279
  33,105
  35,033
  37,070
EBITDA, $m
  9,371
  9,594
  9,866
  10,187
  10,557
  10,975
  11,440
  11,955
  12,518
  13,132
  13,797
  14,515
  15,287
  16,116
  17,003
  17,951
  18,961
  20,037
  21,181
  22,397
  23,687
  25,055
  26,504
  28,038
  29,662
  31,379
  33,195
  35,113
  37,138
  39,277
Interest expense (income), $m
  329
  876
  916
  966
  1,023
  1,088
  1,159
  1,237
  1,322
  1,414
  1,514
  1,620
  1,734
  1,856
  1,985
  2,123
  2,269
  2,424
  2,587
  2,761
  2,944
  3,137
  3,341
  3,556
  3,783
  4,021
  4,273
  4,538
  4,817
  5,110
  5,419
Earnings before tax, $m
  5,841
  6,007
  6,211
  6,455
  6,738
  7,060
  7,420
  7,820
  8,260
  8,741
  11,233
  11,798
  12,408
  13,064
  13,767
  14,520
  15,324
  16,182
  17,095
  18,067
  19,099
  20,195
  21,358
  22,591
  23,896
  25,279
  26,741
  28,288
  29,923
  31,651
Tax expense, $m
  1,577
  1,622
  1,677
  1,743
  1,819
  1,906
  2,003
  2,112
  2,230
  2,360
  3,033
  3,186
  3,350
  3,527
  3,717
  3,920
  4,138
  4,369
  4,616
  4,878
  5,157
  5,453
  5,767
  6,099
  6,452
  6,825
  7,220
  7,638
  8,079
  8,546
Net income, $m
  4,264
  4,385
  4,534
  4,712
  4,919
  5,154
  5,417
  5,709
  6,030
  6,381
  8,200
  8,613
  9,058
  9,537
  10,050
  10,600
  11,187
  11,813
  12,480
  13,189
  13,942
  14,743
  15,591
  16,491
  17,444
  18,453
  19,521
  20,650
  21,844
  23,105

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  58,892
  60,247
  61,795
  63,533
  65,460
  67,573
  69,874
  72,365
  75,049
  77,929
  81,011
  84,299
  87,799
  91,520
  95,468
  99,651
  104,080
  108,763
  113,711
  118,936
  124,449
  130,263
  136,392
  142,848
  149,649
  156,809
  164,346
  172,276
  180,620
  189,395
Adjusted assets (=assets-cash), $m
  58,892
  60,247
  61,795
  63,533
  65,460
  67,573
  69,874
  72,365
  75,049
  77,929
  81,011
  84,299
  87,799
  91,520
  95,468
  99,651
  104,080
  108,763
  113,711
  118,936
  124,449
  130,263
  136,392
  142,848
  149,649
  156,809
  164,346
  172,276
  180,620
  189,395
Revenue / Adjusted assets
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
Average production assets, $m
  16,544
  16,924
  17,359
  17,847
  18,388
  18,982
  19,629
  20,328
  21,082
  21,891
  22,757
  23,680
  24,664
  25,709
  26,818
  27,993
  29,237
  30,553
  31,943
  33,411
  34,959
  36,593
  38,314
  40,128
  42,038
  44,050
  46,167
  48,394
  50,738
  53,203
Working capital, $m
  1,023
  1,047
  1,074
  1,104
  1,137
  1,174
  1,214
  1,257
  1,304
  1,354
  1,408
  1,465
  1,526
  1,590
  1,659
  1,732
  1,808
  1,890
  1,976
  2,067
  2,162
  2,263
  2,370
  2,482
  2,600
  2,725
  2,856
  2,993
  3,138
  3,291
Total debt, $m
  16,962
  17,890
  18,951
  20,141
  21,461
  22,909
  24,485
  26,191
  28,030
  30,003
  32,113
  34,365
  36,763
  39,312
  42,016
  44,882
  47,916
  51,124
  54,513
  58,092
  61,869
  65,851
  70,049
  74,472
  79,131
  84,035
  89,198
  94,630
  100,345
  106,357
Total liabilities, $m
  40,341
  41,269
  42,330
  43,520
  44,840
  46,288
  47,864
  49,570
  51,409
  53,382
  55,492
  57,744
  60,142
  62,691
  65,395
  68,261
  71,295
  74,503
  77,892
  81,471
  85,248
  89,230
  93,428
  97,851
  102,510
  107,414
  112,577
  118,009
  123,724
  129,736
Total equity, $m
  18,551
  18,978
  19,465
  20,013
  20,620
  21,285
  22,010
  22,795
  23,640
  24,548
  25,518
  26,554
  27,657
  28,829
  30,072
  31,390
  32,785
  34,260
  35,819
  37,465
  39,202
  41,033
  42,963
  44,997
  47,139
  49,395
  51,769
  54,267
  56,895
  59,660
Total liabilities and equity, $m
  58,892
  60,247
  61,795
  63,533
  65,460
  67,573
  69,874
  72,365
  75,049
  77,930
  81,010
  84,298
  87,799
  91,520
  95,467
  99,651
  104,080
  108,763
  113,711
  118,936
  124,450
  130,263
  136,391
  142,848
  149,649
  156,809
  164,346
  172,276
  180,619
  189,396
Debt-to-equity ratio
  0.910
  0.940
  0.970
  1.010
  1.040
  1.080
  1.110
  1.150
  1.190
  1.220
  1.260
  1.290
  1.330
  1.360
  1.400
  1.430
  1.460
  1.490
  1.520
  1.550
  1.580
  1.600
  1.630
  1.660
  1.680
  1.700
  1.720
  1.740
  1.760
  1.780
Adjusted equity ratio
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,264
  4,385
  4,534
  4,712
  4,919
  5,154
  5,417
  5,709
  6,030
  6,381
  8,200
  8,613
  9,058
  9,537
  10,050
  10,600
  11,187
  11,813
  12,480
  13,189
  13,942
  14,743
  15,591
  16,491
  17,444
  18,453
  19,521
  20,650
  21,844
  23,105
Depreciation, amort., depletion, $m
  2,655
  2,671
  2,689
  2,709
  2,732
  2,756
  2,783
  2,812
  2,843
  2,877
  944
  983
  1,023
  1,067
  1,113
  1,162
  1,213
  1,268
  1,325
  1,386
  1,451
  1,518
  1,590
  1,665
  1,744
  1,828
  1,916
  2,008
  2,105
  2,208
Funds from operations, $m
  6,919
  7,056
  7,223
  7,421
  7,650
  7,910
  8,200
  8,521
  8,873
  9,258
  9,144
  9,595
  10,081
  10,604
  11,163
  11,761
  12,400
  13,081
  13,805
  14,575
  15,393
  16,261
  17,181
  18,156
  19,189
  20,281
  21,437
  22,658
  23,949
  25,313
Change in working capital, $m
  20
  24
  27
  30
  33
  37
  40
  43
  47
  50
  54
  57
  61
  65
  69
  73
  77
  81
  86
  91
  96
  101
  106
  112
  118
  124
  131
  138
  145
  152
Cash from operations, $m
  6,899
  7,032
  7,196
  7,391
  7,617
  7,873
  8,160
  8,478
  8,827
  9,208
  9,090
  9,538
  10,021
  10,539
  11,094
  11,689
  12,323
  12,999
  13,719
  14,484
  15,297
  16,160
  17,075
  18,044
  19,070
  20,157
  21,306
  22,520
  23,804
  25,160
Maintenance CAPEX, $m
  -673
  -686
  -702
  -720
  -741
  -763
  -788
  -814
  -843
  -875
  -908
  -944
  -983
  -1,023
  -1,067
  -1,113
  -1,162
  -1,213
  -1,268
  -1,325
  -1,386
  -1,451
  -1,518
  -1,590
  -1,665
  -1,744
  -1,828
  -1,916
  -2,008
  -2,105
New CAPEX, $m
  -318
  -381
  -435
  -488
  -541
  -594
  -646
  -700
  -754
  -809
  -866
  -924
  -983
  -1,045
  -1,109
  -1,175
  -1,244
  -1,316
  -1,390
  -1,468
  -1,549
  -1,633
  -1,722
  -1,814
  -1,910
  -2,011
  -2,117
  -2,228
  -2,344
  -2,465
Cash from investing activities, $m
  -991
  -1,067
  -1,137
  -1,208
  -1,282
  -1,357
  -1,434
  -1,514
  -1,597
  -1,684
  -1,774
  -1,868
  -1,966
  -2,068
  -2,176
  -2,288
  -2,406
  -2,529
  -2,658
  -2,793
  -2,935
  -3,084
  -3,240
  -3,404
  -3,575
  -3,755
  -3,945
  -4,144
  -4,352
  -4,570
Free cash flow, $m
  5,907
  5,965
  6,059
  6,182
  6,335
  6,516
  6,726
  6,963
  7,229
  7,524
  7,317
  7,670
  8,055
  8,470
  8,919
  9,401
  9,917
  10,470
  11,061
  11,691
  12,362
  13,076
  13,835
  14,640
  15,495
  16,401
  17,361
  18,377
  19,452
  20,590
Issuance/(repayment) of debt, $m
  748
  928
  1,061
  1,191
  1,319
  1,448
  1,576
  1,706
  1,838
  1,973
  2,111
  2,252
  2,398
  2,549
  2,704
  2,866
  3,034
  3,208
  3,390
  3,579
  3,776
  3,983
  4,198
  4,423
  4,658
  4,905
  5,163
  5,432
  5,715
  6,011
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  748
  928
  1,061
  1,191
  1,319
  1,448
  1,576
  1,706
  1,838
  1,973
  2,111
  2,252
  2,398
  2,549
  2,704
  2,866
  3,034
  3,208
  3,390
  3,579
  3,776
  3,983
  4,198
  4,423
  4,658
  4,905
  5,163
  5,432
  5,715
  6,011
Total cash flow (excl. dividends), $m
  6,656
  6,893
  7,120
  7,373
  7,654
  7,964
  8,302
  8,670
  9,068
  9,497
  9,427
  9,922
  10,453
  11,019
  11,623
  12,266
  12,951
  13,678
  14,451
  15,270
  16,139
  17,059
  18,033
  19,063
  20,153
  21,306
  22,523
  23,809
  25,168
  26,601
Retained Cash Flow (-), $m
  -371
  -427
  -488
  -548
  -607
  -666
  -725
  -785
  -845
  -907
  -971
  -1,036
  -1,103
  -1,172
  -1,244
  -1,318
  -1,395
  -1,475
  -1,559
  -1,646
  -1,737
  -1,831
  -1,930
  -2,034
  -2,142
  -2,255
  -2,374
  -2,498
  -2,628
  -2,764
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  6,285
  6,467
  6,632
  6,826
  7,048
  7,298
  7,577
  7,885
  8,222
  8,590
  8,457
  8,887
  9,350
  9,847
  10,379
  10,949
  11,556
  12,203
  12,892
  13,624
  14,402
  15,227
  16,102
  17,030
  18,011
  19,050
  20,149
  21,311
  22,539
  23,837
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  6,025
  5,920
  5,771
  5,620
  5,463
  5,297
  5,119
  4,928
  4,723
  4,503
  4,016
  3,792
  3,555
  3,306
  3,047
  2,782
  2,514
  2,247
  1,985
  1,731
  1,490
  1,263
  1,055
  867
  701
  556
  432
  330
  246
  179
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Honeywell International Inc. is a technology and manufacturing company. The Company operates through four segments: Aerospace, Home and Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. The Company's Aerospace segment supplies products, software and services for aircraft and vehicles that it sells to original equipment manufacturers (OEMs) and other customers. The Home and Building Technologies segment provides products, software, solutions and technologies that help owners of homes stay connected and in control of their comfort, security and energy use. The Performance Materials and Technologies segment is engaged in developing and manufacturing materials, process technologies and automation solutions. The Safety and Productivity Solutions segment is engaged in providing products, software and connected solutions to customers that manage productivity, workplace safety and asset performance.

FINANCIAL RATIOS  of  Honeywell International Inc. (HON)

Valuation Ratios
P/E Ratio 26.1
Price to Sales 3.2
Price to Book 6.5
Price to Tangible Book
Price to Cash Flow 22.8
Price to Free Cash Flow 28.5
Growth Rates
Sales Growth Rate 1.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2.1%
Cap. Spend. - 3 Yr. Gr. Rate 2.9%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 62.9%
Total Debt to Equity 81.4%
Interest Coverage 21
Management Effectiveness
Return On Assets 9.8%
Ret/ On Assets - 3 Yr. Avg. 10.1%
Return On Total Capital 14.7%
Ret/ On T. Cap. - 3 Yr. Avg. 15.9%
Return On Equity 25.5%
Return On Equity - 3 Yr. Avg. 25.4%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 30.9%
Gross Margin - 3 Yr. Avg. 29.9%
EBITDA Margin 19.9%
EBITDA Margin - 3 Yr. Avg. 19.2%
Operating Margin 16.4%
Oper. Margin - 3 Yr. Avg. 16%
Pre-Tax Margin 16.4%
Pre-Tax Margin - 3 Yr. Avg. 16%
Net Profit Margin 12.2%
Net Profit Margin - 3 Yr. Avg. 11.7%
Effective Tax Rate 24.8%
Eff/ Tax Rate - 3 Yr. Avg. 25.6%
Payout Ratio 39.8%

HON stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HON stock intrinsic value calculation we used $41802 million for the last fiscal year's total revenue generated by Honeywell International Inc.. The default revenue input number comes from 0001 income statement of Honeywell International Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HON stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for HON is calculated based on our internal credit rating of Honeywell International Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Honeywell International Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HON stock the variable cost ratio is equal to 68.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6692 million in the base year in the intrinsic value calculation for HON stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Honeywell International Inc..

Corporate tax rate of 27% is the nominal tax rate for Honeywell International Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HON stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HON are equal to 38.8%.

Life of production assets of 24.1 years is the average useful life of capital assets used in Honeywell International Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HON is equal to 2.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $18180 million for Honeywell International Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 729.063 million for Honeywell International Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Honeywell International Inc. at the current share price and the inputted number of shares is $120.3 billion.

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