Mike Madsen, President and CEO of Honeywell International (NASDAQ:HON) Aerospace division, shared his views on the future of electric vertical take-off and landing vehicles (eVTOLs) at a recent Jefferies conference. Madsen believes the initial demand for this type of air taxi travel will be limited but will eventually pick up pace beginning in 2030.
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Madsen noted, “There will be some initial vehicles introduced that’ll be used for some limited use cases maybe under some pretty strict requirements, and then it will take off.” As per Madsen’s estimates, Honeywell’s eVTOL sales should reach $2 billion by 2030.
Honeywell is a technology and manufacturing company and one of the largest suppliers of defense aircraft and equipment to the U.S. government. Honeywell Aerospace is an original equipment manufacturer (OEM) supplier for many air taxi companies. As per Madsen, eVTOLs will first see demand from military and cargo transporters before they become a popular mode of transport for daily passengers.
What are eVTOLs?
eVTOLs are similar to helicopters. Both are vertical lift aircraft, but eVTOLs are comparatively smaller and can be used to transport passengers in congested cities. Also, eVTOLs are battery-operated, making them safer, cheaper, and more convenient.
Several private companies have ventured into the eVTOL space and are making deals with larger aviation companies to work as smaller transport carriers in the future. eVTOLs are also being primed as “air taxis” and may be one of the better ride-sharing alternatives over short distances.
Notably, eVTOL manufacturers require certification from the Federal Aviation Administration and other regulatory agencies.
Is HON a Good Stock to Buy?
On TipRanks, HON stock has a Moderate Buy consensus rating based on eight Buys, five Holds, and one Sell rating. Also, the average Honeywell International price target of $219 implies 16.5% upside potential from current levels. Meanwhile, HON stock has lost 11.8% so far this year.
