Honeywell International, Inc. (HON), an American technology and manufacturing company, increased its business jet deliveries forecast at its 30th annual Global Business Aviation Outlook, citing a rebound in travel demand as COVID-19-related restrictions ease. The company projects 7,400 new business jet deliveries from 2022 to 2031, valued at $238 billion. The forecast shows a 1% jump from the prior ten-year period forecast given a year ago. Shares closed at $217.70 on October 8.
Business jet flight hours are expected to grow by 50% year-over-year in 2021 and 5% above pre-pandemic levels. Most business jet operators have also witnessed a significant rise in used aircraft purchase plans, 12% above last year’s report. Furthermore, 90% of operators stated that the COVID-19 pandemic has not affected their purchase plans of new or used jets, and 100% of operators said they have no plans of canceling aircraft deliveries.
In a recent operator survey, 65% of operators said that private jet usage is expected to witness a huge surge in 2022. Honeywell stated that the demand for jets is putting pressure on manufacturers as used aircraft inventory levels are already at record lows, increasing demand for new jets. Increased demand for more than 6,500 used jets is expected in the next five years. (See Insider’s Hot Stocks on TipRanks)
Commenting on the outlook, Heath Patrick, President, Americas Aftermarket, Honeywell Aerospace said, “Despite the ongoing challenges presented by the pandemic, flight hours have recovered and grown beyond pre-pandemic levels. The overall health of the business jet market is strong, and growth is expected to continue.”
Recently, Morgan Stanley analyst Joshua Pokrzywinski lowered his price target on the stock to $229 (5.2% upside potential) from $246 while maintaining a Hold rating.
Overall, the stock has a Moderate Buy consensus rating based on 6 Buys and 5 Holds. The average Honeywell International price target of $241.82 implies 11.1% upside potential to current levels. Shares have gained 24.1% over the past year.