HONEYWELL (=) : 2026 guidance update: in line to slightly better than expected

Research evidence excerpt

HONEYWELL (=) : 2026 guidance update: in line to slightly better than expected

Refinitiv

expected in the second half. HON quantified a $50-75m impact from the Middle East. Guidance assumes the PSS and

WWS divestitures close as of October 1st, 2026, and that the acquisition of Johnson Matthey’s Catalyst business closes

July 1st, 2026.

Details on end market commentary: HON’s FY outlook for 2-3% organic growth assumes 3-5% growth in the back

half of 2026, implying an acceleration due to strong demand in BA and PA&T, as well as a continued short cycle

recovery in IA. For the quarter-to-date through May, orders are up HSD in total. In BA, HON highlighted exceptionally

strong orders across regions and product lines, tracking close to double digits this quarter-to-date. While HON cited

some pull-forward potential from 2H into 1H ahead of price increases, the company sounded confident that the pace of

orders reflects sustained broader demand strength as well as share gains. In IA, HON now expects ~flat yoy growth,

which is an improvement from the prior guide for a LSD decline. HON called out specific improvements in short cycle

markets in Europe and Asia driving the increase. HON added that the second half should see LSD growth improving

further to MSD growth in sales for 2027. In PA&T, HON reiterated its view for ~flat FY organic growth, calling out a

transitory impact from the Middle East conflict resulting in lower catalyst shipments and delayed automation upgrades.

That said, HON expects a second half improvement to HSD growth driven by large orders and backlog conversion

supportive of second-half revenue visibility. HON sees a $50-75m impact in 2Q from the Middle East conflict, which

assumes no major escalation in tensions.