Fundamentals · HON
DuPont (ROE Decomposition) for HON
AI-generated plain-English read of dupont (roe decomposition) for HON. Updated daily.
Leverage-driven ROE, improving
highROE is rising (30.1%) but the engine is leverage — a 4.10× equity multiplier means a small drop in profitability gets amplified straight into the bottom line. Genuine improvement would show up in margins or asset efficiency first.
What will probably happen
- ROE is on an upward path — if the leading leg continues, the next reported period should sustain or extend the gain.
- Elevated leverage (4.10×) is amplifying ROE in both directions. If margins slip, ROE will fall faster than the income statement suggests.
What to do
- If you HOLD this stock
- Leverage (4.10×) is doing the heavy lifting. Hold only if you're comfortable that the debt load is sustainable in a slower earnings environment. Watch interest coverage and free cash flow.
- If you are EVALUATING this stock
- Don't let the headline ROE (30.1%) mislead you — it's primarily a function of 4.10× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
- If you trade OPTIONS
- No sharp DuPont signal either way. Premium is fairly priced for a fundamentals-stable story — wait for a clearer inflection in one of the legs before positioning directionally.
35 periods with all three DuPont legs populated — trend reads are reliable.
Technical details
Technical analysis
- ROE
- 30.1% — improving
- Sector context
- not provided
- Periods analysed
- 35
- Primary ROE driver
- Leverage Driven
- Profitability (net margin)
- 58.5% — improving, healthy
- Asset efficiency (turnover)
- 0.13× — stable, healthy
- Leverage (equity multiplier)
- 4.10× — deteriorating, healthy [elevated]
Key levels
| Level | Value |
|---|---|
| latest em | 4.102 |
| latest roe | 0.301 |
| latest margin | 0.585 |
| latest turnover | 0.126 |
| em high threshold | 4 |
| em critical threshold | 5 |