HON: 2026 Guidance Update Abridged Transcript

研报英文原文证据摘录

HON: 2026 Guidance Update Abridged Transcript

ith the most recent funding round at a valuation of $10bn (~$5.2bn attributable to

Implied Cash P/E 28x Honeywell). There could also be ~20c benefit to earnings from a de-consolidation of

Target Price $314 this asset.

Upcoming Investor Events: We view the upcoming June investor events as

Base Case opportunities for management to reinforce the message of accelerated organic

growth from portfolio refinement and upsized investment spending, as well as Organic Growth (CAGR: '23-'25) 5%

margin expansion from Aero OE repricing initiatives, supply chain unlock and Process

OM Expansion ('23-'25) (1.4%)

mix improvement.

Cash EPS 2027e (ex-Pension) $10.92

Pension Surplus Monetization: Honeywell has the potential to monetize a portion of

Surplus Capital 7 its $5.3bn ($8/share) pension plan surplus at YE25.

Implied Cash P/E 25x

Target Price $275

Potential Risks

RemainCo Portfolio Work in Progress: There has been a high degree of acquisitions

Bear Case

and disposals, as management seeks to reposition RemainCo. However, the Industrial

Organic Growth (CAGR: '23-'25) 5%

Automation segment seems subscale and so we view this portfolio surgery as very

OM Expansion ('23-'25) (1.4%) much a work in progress.

Cash EPS 2027e (ex-Pension) $9.86 RemainCo Post-Spin Earnings Noise: Stranded costs resulting from Aero separation

Surplus Capital 7 could be substantial and amount to $400-500m. We would expect these to be

Implied Cash P/E 19x substantially eliminitated by YE27, but it has potential to create friction to RemainCo

Target Price $184 estimates in 2H26.

Pension Income: Honeywell has a substantial contibution from non-cash pension

income, sized at ~8% EPS. This is excluded from our valuation framework but this