Honeywell International Inc. (HON) Beat and raise, 2H growth to accelerate

Equity Research 24 July 2026 | 2:13PM EDT

Honeywell International Inc. (HON) Beat and raise, 2H growth to accelerate

HON 12m Price Target: $270.00 Price: $246.27 Upside: 9.6% BUY Joe Ritchie Bottom line: Beat and raise, 2H growth to accelerate. The new | Goldman Sachs & Co. LLC Honeywell Technologies reported a strong quarter out of the gates Ken Chen with 2Q segment EBIT (excluding corporate) that was +4% vs. | Goldman Sachs & Co. LLC FactSet consensus, driven by stronger EBIT across all three segments. Organic sales were above our expectations, driven by Luke McCollester, CFA | Goldman Sachs & Co. LLC better growth across the board. Orders were the highlight, +16% with TTM orders +11%. The acceleration in the Middle East, +>50% is notable. Going forward, HON raised the 2026 EPS guide to Key Data _____________________________________ Market cap: $78.5bn $8.05-$8.35 from $7.90-$8.30, above consensus at the high end. Enterprise value: $102.8bn 3m ADTV: $700.3mn We believe the guidance is conservative. The Building Automation United States and Industrial Automation outlooks appear well supported, with IA Americas Multi-Industry M&A Rank: 3 expected to exit 4Q at 22%+ segment margins. PA&T remains the GS Forecast __________________________________ key swing factor, as backlog conversion and catalyst shipments 12/25 12/26E 12/27E 12/28E

support a 2H growth inflection, while Middle East uncertainty and Revenue ($ mn) EBITDA ($ mn) 19,945.0 2,696.0 20,154.8 4,470.1 20,404.6 5,843.5 21,253.3 6,301.6 Johnson Matthey dilution limit near-term margin upside. The JM EBIT ($ mn) 1,154.0 3,177.1 4,595.5 5,053.6 EPS ($) margin headwind could persist through 1H27, with PA&T margin P/E (X) expansion more likely beginning in 2H27. All in, we maintain our EV/EBITDA (X) FCF yield (%) 8.0 1.9 2.9 3.6 FY26/FY27/FY28 EPS estimates at $8.40/$9.60/$10.85. We remain Dividend yield (%) 0.8 0.6 0.7 0.7 Buy rated and raise our 12-month PT to $270. Net debt/EBITDA (X) 8.2 5.4 3.9 3.3

6/26 9/26E 12/26E 3/27E What happened. HON reported adjusted 2Q26 EPS of $1.95. 2Q26 EPS ($) segment EBIT (excluding Corporate) was $1,171mn. 2Q26 organic GS Factor Profile ______________________________ growth was +4%, with PA&T -1%, BA +9%, IA +4%. HON raised its Growth

FY26 adj. EPS guide to $8.05-$8.35 from $7.90-$8.30. Organic Financial Returns growth is now expected to be 3%-4% (vs. 2%-3% prior), while the Multiple margin expansion target is now 250-290bps (vs. 220-270bps prior). The operating cash flow target of ~$2.1bn and adj. FCF guidance of Integrated

~$2.0bn are unchanged. Percentile 20th 40th 60th 80th 100th

Estimate changes and valuation. We keep our FY26/FY27/FY28 HON relative to Americas Coverage

EPS estimates unchanged at $8.40/$9.60/$10.85. We raise our HON relative to Americas Multi-Industry

12-month PT to $270 (from $257) as we roll forward estimates, and Source: Company data, Goldman Sachs Research estimates. See disclosures for details. raise our target multiple to 15.5x (from 15.0x) Q5-Q8 EBITDA, driven by higher visibility into the 2H growth and margin ramp.

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Goldman Sachs Honeywell International Inc. (HON)

Honeywell International Inc. (HON) Balance Sheet ($ mn) _______________________________________ BUY Rating since Mar 20, 2013 12/25 12/26E 12/27E 12/28E Cash & cash equivalents 12,487.0 8,963.4 8,465.3 8,470.1 Accounts receivable 7,621.0 8,061.9 8,161.8 8,501.3 Inventory 6,162.0 4,031.0 4,489.0 4,675.7 Ratios & Valuation __________________________________________ Other current assets 4,557.0 4,590.0 4,590.0 4,590.0 12/25 12/26E 12/27E 12/28E Total current assets 30,827.0 25,646.3 25,706.2 26,237.1 P/E (X) Net PP&E 4,629.0 2,171.4…