HON: Meet the New, Old Honeywell

Research evidence excerpt

HON: Meet the New, Old Honeywell

June 29, 2026

Investment Conclusion

Honeywell Technologies (HON): Outperform Rating - YE26 Price Target of $256

170 Investment Thesis

160 We View 4-6% as Credible Growth Range: Honeywell has laid out a 4-6% p.a. growth

150 outlook, which nets to 1-3% ex-3pts of price. We view this as credible, assuming a

140 stronger outlook for global process capex (in a world of enhanced energy supply

130 chain security), continued outgrowth in Building Automation and a short cycle

industrial recovery. 120

Opportunity to Overdrive Margin Commitments: Management sees a path to 24%

margin by 2029 vs. ~20% proforma for 2026. The bulk of this expansion is driven by

mix normalization in Process and elimination of stranded costs post-Aero spin. We

90 see scope for 100-200bps upside in a stronger volume environment.

80 Surplus Capital Optionality: We see approximately $9bn of surplus capital optionality

70 thro' 2029, with a focus on bolt-on M&A (sized in $1-3bn range). However, there is

monetize its 47% stake in Quantinuum. Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Mar-26 scope for capital deployment to scale dramatically higher if the company elects to

OP Rating: We believe that Honeywell Technologies (RemainCo) has scope to re-rate

HON EE/MI S&P 500 higher if the market becomes more comfortable with the outlook for low-DD EPS

Source: Wolfe Research, FactSet

Potential Catalysts Price Target Methodology

Post-Spin Money Flows: Honeywell is now a more focused portfolio with potential to

Bull Case show above-market EPS growth. This could attract a new wave of investor interest

Organic Growth (CAGR: '23-'25) 5% following a long period of recent underperformance.