HONEYWELL (=) : The waiting game: a “show me” story that may take time

研报英文原文证据摘录

HONEYWELL (=) : The waiting game: a “show me” story that may take time

Refinitiv

Revisiting our HON thesis into the Aerospace spinoff

Ahead of HON’s spinoff of its Aerospace Tech business (expected June 29th), we

revisited our thesis on the stock and are becoming more constructive on some of the

longer-term prospects. When we initiated on HON in December 2025 (HON: Work in

Progress), we were concerned about timing risk with the date of the Aerospace spinoff

still a long way away (at the time, it was expected to occur in H2’26). HON was also

undergoing a complicated portfolio shift with both M&A and divestments, while navigating

a challenging macro environment across nearly all business segments. Despite a

discounted valuation relative to its industrial peers, we believed there were too many

moving pieces and lingering uncertainty in multiple end markets to recommend the stock.

After six months, however, several key risks have moderated and the story has simplified,

in our view. HON closed several deals at reasonable valuations and announced some

key divestments in warehouse automation (completion expected by H2’26). In addition,

the macro picture improved in several areas like industrial and process automation. U.S.

PMI datapoints have turned higher (above 50), while changing geopolitics have created

a potential long-term tailwind in Process Automation, in our view. Management also laid

out a detailed margin expansion plan across all three RemainCo. segments, which

exceeded Street expectations. While the cycle is benefitting most industrials, company-

specific margin expansion efforts may be able to drive EPS growth above some peers

over the next couple years.

With that said, HON is calling for unprecedented profitability in several segments