Honeywell (HON) reported a good third quarter today: EPS of $2.27 vs. $2.25 on a 3% sales increase, or 2% excluding the impact of currency. Results were slightly above the company’s guidance. Strongest was their Aerospace segment, up 18%, which was helped by increased flight activity and greater original equipment sales. Safety and Productivity Solutions was the weak spot, where sales were down 25% as the warehouse automation market slumps. There is hope here for improvement, however, with orders up 50% on a sequential basis.

The company raised the low end of its EPS guidance by nickel, and the company now expects to earn between $9.10 and $9.20 a share this year. While the economy outlook for next year is uncertain, I believe HON can earn $10.00 a share next year based on current trends, and less than 18X this estimate, the stock of this high-quality company should outperform over the next 6 months.

HON is a buy below $200, my target is $220.