Darius Adamczyk, CEO of Honeywell International (HON), remains optimistic about his outlook for the global economy in 2023 and the company’s prospects heading into what is expected to be an economic downturn. That’s consistent with the Club’s belief that companies like Honeywell that make things for profit will benefit in the coming year. “There will be strengths, such as our aerospace business” and the energy segment, Adamczyk said in an interview with CNBC from the World Economic Forum in Davos, Switzerland, on Tuesday. However, he added, “some short-cycle companies will struggle.” Honeywell is a diversified industrial giant focused on critical areas of the economy. Its products include aircraft engines, industrial chemicals and carbon capture technology to name a few. Adamczyk indicated that some of the biggest challenges from last year are likely to continue into 2023. “There are some indicators that the worst inflation is starting to turn around, but we should not forget that the Fed and other central banks have to be quite aggressive in their policies .to make sure inflation is under control.” Speaking to CNBC in early December, Adamczyk said he’s not “overly pessimistic about 2023,” adding that he doesn’t believe the economy will be a “disaster.” Despite Tuesday’s drop, shares of Honeywell are up more than 18% over the past three months compared to the S&P 500’s more than 7% gain. Honeywell is expected to release fourth-quarter financial results on February 2. HON 1Y mountain Honeywell (HON) 1 year performance Climate change spending According to Adamczyk, spending on initiatives to combat the impacts of climate change should hold up even if there is a recession. “I have not seen a correlation between a tougher economy and a divestment from a path to sustainability.” The CEO said more than 60% of Honeywell’s total business is climate-related solutions. “All of these companies have made commitments to be carbon neutral.” He added that “it will take several years,” suggesting that Honeywell’s energy technologies will be in demand despite a more difficult economic period. Reopening China China’s reopening after its strict zero-Covid policy is positive for the global economy, said Adamczyk, who called China one of the world’s “core international destinations”. He sees “massive pent-up demand” from both businesses and consumers in the world’s second-largest economy. The easing of pandemic restrictions there, particularly on travel, is expected to boost demand for space travel. That would be positive for Honeywell’s aerospace services, which make up about a third of Honeywell’s revenue. Adamczyk expects the first quarter to be “a bit rocky as the country opens up,” but over time he’s excited about the prospect. The club’s point of view We were pleased to hear optimism from Adamczyk on Tuesday amid the pessimism in the market. Honeywell has managed to perform despite a challenging macroeconomic environment filled with supply constraints, decades of high inflation and rising interest rates. Going forward, the company’s aviation business is well positioned to benefit from the recovery of the Chinese economy, while its sustainability technology solutions look recession-proof. (Jim Cramer’s Charitable Trust is long HON. See here for a full list of the shares.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charity’s portfolio. If Jim has talked about a stock on CNBC TV, he will wait 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIAL OBLIGATION OR DUTY EXISTS OR IS CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Darius Adamczyk, Chairman and CEO of Honeywell, speaks about Squawk Box at WEF in Davos, Switzerland on January 17, 2023.
Adam Galica | CNBC
Honeywell International (HON) CEO Darius Adamczyk remains optimistic about his outlook for the global economy in 2023 and the company’s prospects heading into what is expected to be an economic downturn. That’s consistent with the Club’s belief that companies like Honeywell that make things for profit will benefit in the coming year.