Honeywell Technologies: 2Q26 Earnings Preview

Research evidence excerpt

Honeywell Technologies: 2Q26 Earnings Preview

ssing well, with many of the largest accounts won

and performance expected to grow over time. Overall short cycle industrial trends

continue to be of gradual recovery. FAST daily sales growth improved to 14.7% for the

second quarter, up from 12.4% in the first quarter, reflecting continued market

outperformance. Market conditions improved at a pace similar to last quarter. US PMI

averaged slightly above 53 for the quarter, up from 52 last quarter, and industrial

production was slightly positive year-over-year in April and May. This lines up with the

gradual improvement that started late last year. Importantly, the improvement was not

concentrated in any one area. It showed up across customer types and markets. While

manufacturing and construction remained healthy, certain other end-markets,

particularly those tied to discretionary consumer spending continued to lag. Overall,

demand conditions were stable to modestly positive, while cost inflation remained less

predictable. On pricing, they realized approximately 2.9% in the quarter versus roughly

3.5% in Q1. The sequential step down reflects lapping the onset of pricing actions taken

in Q2 of last year. MSM F3Q average daily sales grew by 7.8% y/y, largely contributed

by price, with volumes turning positive up ~0.5% across all customer types (F2Q/F1Q

-4%/~flat). The industrial recovery was characterized as being in the “third inning,”

supported by five consecutive months of BMI readings above 50 and positive IP readings

across most top manufacturing end markets, with 4/5 top end markets showing strong

growth in F3Q, the sole exception being automotive, which itself turned positive heading

into June, with summer shutdown patterns changing significantly, a positive indicator.