Honeywell International (HON) Guidance summary

Opening remarks and agenda

• Provided an overview of the 2026 guidance update, reaffirming full-year guidance ahead of the Aerospace spin-off and outlining the transition to Honeywell Technologies, with leadership present to address investor questions.

• Announced the upcoming Investor Day on June 11th, where new three-year financial targets and strategic direction will be introduced.

• Provided an initial framework for Honeywell Technologies' second half 2026 guidance, reflecting portfolio actions and changes in adjusted results presentation.

Guidance on key objectives

• 2026 Honeywell Technologies guidance: sales of $19.9B–$20.2B, organic growth of 2%–3%, segment margin of 19.8%–20.3%, adjusted EPS of $3.95–$4.15 (up 22%–28%), and free cash flow of ~$2.0B with ~95% conversion in the second half.

• Second half 2026 guidance: sales of $10.1B–$10.3B, organic growth of 3%–5%, segment margin of 20.9%–21.6%, adjusted EPS of $2.20–$2.35.

• Guidance reflects removal of aerospace, Quantinuum, and pension income impacts, as well as the effects of planned divestitures and acquisitions, including Johnson Matthey Catalyst Technologies.

• Full-year segment margin expansion of 220–270 basis points, targeting a 22% exit margin.

• Adjusted results will exclude income from overfunded pension liability and Quantinuum following its IPO.

Market trends and strategic opportunities

• Strong demand continues in Building Automation and Process Automation & Technology, with backlog conversion and innovative product launches driving share gains.

• Industrial automation outlook improved from negative to flat, with recovery in Europe and Asia.

• Pricing actions are offsetting rising inflation, and large orders secured are expected to drive improved demand into 2H26 and 2027.

• LNG and energy security concerns drive incremental demand, especially in PA&T.

• Orders growth remains robust in Q2, with backlog conversion supporting second-half revenue visibility.