Honeywell International Inc (NYSE:HON, XETRA:ALD) was upgraded to ‘Neutral’ from ‘Underperform’ by Bank of America, which raised its price objective to $265 from $220, above current levels of $247, following a second quarter performance that exceeded expectations and improved visibility into the company's growth outlook.
The analysts highlighted stronger execution, broad-based order growth and increased 2026 guidance as key factors behind the rating change.
"Honeywell Technologies delivered a broad-based Q2 beat and raised its 2026 organic growth, segment margin and adjusted EPS guidance," the analysts wrote. "The more important takeaway, in our view, was broad-based order strength across all three segments."
Bank of America said the results helped ease previous concerns around aerospace execution, inconsistent operational performance and limited growth visibility.
"We are more positive following the quarter, as improving execution supports the earnings ramp while management's cautious initial approach to guiding the new company appears to leave some contingency in the outlook and room for positive revisions into the year end," the analysts wrote.
Honeywell reported total orders of $5.7 billion, up 16% organically, with a book-to-bill ratio above 1.1x and backlog increasing 9%. Orders rose 24% organically in Performance Aerospace & Technologies, 13% in Building Automation and 10% in Industrial Automation.
Bank of America said the order growth supports Honeywell's outlook for 4% to 6% organic growth in both the third and fourth quarters, with backlog conversion expected to accelerate in Performance Aerospace & Technologies and Industrial Automation growth improving in the second half.
The firm raised its 2026 adjusted EPS estimate to $8.25 from $8.05 and increased its segment margin forecast to 20.3% from 20.1%, while maintaining its revenue estimate at $20.1 billion. Bank of America expects continued strength in Building Automation, improving growth in Performance Aerospace & Technologies and higher Industrial Automation margins into 2027.