Honeywell's 2026 Financial Outlook and Aerospace Spin-Off Update
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: seekingalpha
- Earnings Beat: Honeywell reported a Q4 non-GAAP EPS of $2.59, beating expectations by $0.05, indicating stable profitability; however, revenue of $9.76 billion, up 6.4% year-over-year, missed estimates by $160 million, reflecting market demand challenges.
- Future Guidance: The company anticipates adjusted EPS for 2026 to range between $10.35 and $10.65, slightly above the consensus of $10.42, demonstrating management's confidence in future earnings growth, with an expected increase of 6% to 9%.
- Aerospace Spin-Off: Honeywell announced that its aerospace division is expected to spin off in Q3 2026, with a leadership team already in place, a strategic move aimed at enhancing business focus and market competitiveness, potentially creating higher shareholder value.
- Cash Flow Outlook: The projected free cash flow for 2026 is between $5.3 billion and $5.6 billion, with a growth rate of 4% to 10%, which will provide robust support for future investments and shareholder returns, further solidifying the company's financial health.
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Analyst Views on HON
Wall Street analysts forecast HON stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for HON is 235.07 USD with a low forecast of 195.00 USD and a high forecast of 262.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
8 Buy
6 Hold
1 Sell
Moderate Buy
Current: 220.910
Low
195.00
Averages
235.07
High
262.00
Current: 220.910
Low
195.00
Averages
235.07
High
262.00
About HON
Honeywell International Inc. is an integrated operating company serving a range of industries and geographies around the world, with a portfolio that is underpinned by its Honeywell Accelerator operating system and Honeywell Forge platform. The Company provides actionable solutions for aerospace, building automation, industrial automation, process automation, and process technology. The Company supplies products, software, and services for aircrafts that it sells to original equipment manufacturers (OEM) and other customers in a variety of end markets. The Company’s portfolio of solutions and services is used in buildings worldwide for fire prevention, controls, access and security. Its offerings serve as the fundamental building blocks of industrial automation. Its sensor technologies and value-added smart edge devices offer connectivity across a variety of sensing and measurement applications. The Company offers a comprehensive portfolio of end-to-end process automation solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Honeywell to Announce Q4 Earnings on January 29
- Earnings Announcement: Honeywell is set to release its Q4 2023 earnings report on January 29 before market open, with consensus EPS estimate at $2.54, reflecting a 2.8% year-over-year increase, showcasing the company's ongoing profitability.
- Revenue Expectations: The revenue estimate stands at $9.9 billion, indicating a 2.0% year-over-year decline, which highlights the challenges the company faces in the current economic climate and may affect investor confidence in future growth.
- Historical Performance: Over the past two years, Honeywell has exceeded EPS estimates 100% of the time and revenue estimates 75% of the time, demonstrating strong performance in managing profitability.
- Estimate Revisions: In the last three months, there have been no upward revisions for EPS or revenue estimates, with both experiencing nine downward revisions, suggesting a cautious market outlook on the company's future performance.
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Honeywell Reports Q4 2025 Results and 2026 Outlook
- Strong Sales Growth: Honeywell's Q4 2025 sales reached $9.758 billion, a 6% year-over-year increase, primarily driven by robust demand in Aerospace and Building Automation, with orders growing 23% year-over-year, resulting in a record backlog of over $37 billion heading into 2026.
- Profitability Decline: Despite a 17% increase in adjusted EPS to $2.59, the reported EPS fell 72% to $0.49 due to one-time impairment charges, reflecting challenges in managing cost pressures and legal litigations.
- Cash Flow Performance: Free cash flow surged 48% to $2.512 billion in 2025, although operating cash flow decreased by 38% to $1.241 billion, indicating effective capital management, with expectations for free cash flow to grow further to $5.3 billion to $5.6 billion in 2026.
- Strategic Restructuring Progress: Honeywell plans to complete the spin-off of its Aerospace business in Q3 2026, marking a significant step in optimizing its portfolio and enhancing operational efficiency, which is expected to drive long-term growth and cross-portfolio synergies.
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