Honeywell Aerospace (HONA) AI Stock Analysis

Company Guidance

Honeywell Aerospace is maintaining 2026 organic growth guidance of 4% to 5%, with fourth quarter organic sales expected to be “modestly below the full year range”; fourth quarter output growth is expected to be “consistent with levels seen in the first 3 quarters of the year,” while the benefits of supply chain actions will “step up in 2027.” The company is narrowing its 2026 pro forma standalone adjusted EBIT guidance range around the same midpoint of $4.4 billion, raising pro forma standalone adjusted EPS guidance to $7.85 to $8, and raising second half free cash flow guidance to $1.2 billion to $1.4 billion, with capital expenditures of about $650 million for the year. No IEEPA tariff refunds are currently anticipated in the fourth quarter, creating a more than 100 basis point sequential margin headwind, and fourth quarter margin should be more similar to the first half of the year; the company expects to exit this year in the mid-23s. For 2027, output growth is expected to ramp throughout the year, with higher output growth translating to accelerating sales growth and healthier allocations across all end markets, while investments will run through the P&L and CapEx, next year’s CapEx is expected to step up, and mix is expected to remain a headwind.