Honeywell Aerospace Inc. (HONA)

Price$158.78Cached quoteAs of 2026-09-26 03:15 UTC

AI: Fair-priced

Big pictureDemand and backlog look durable, while earnings and cash conversion are temporarily much weaker than sales.

Q2 sales rose 5% to $4.522 billion and backlog reached $18.154 billion, up 9%, showing healthy demand. Adjusted EBIT fell 7% to $995 million and net income fell about 70% to $256 million; adjusted EBIT removes specified unusual items and better approximates recurring operating earnings. Six-month operating cash flow was $346 million versus $1.025 billion a year earlier, while capital spending was $260 million. Management still guides to $1.0-$1.5 billion of second-half free cash flow, meaning cash left after capital expenditures. With no annual periods in the supplied history, durability confidence is lower than usual.

Business strengthA large installed base and diversified aerospace exposure support recurring demand, but leverage raises execution risk.

Commercial aftermarket generated $2.026 billion of Q2 sales, about 45% of the total, and grew 8%; recurring replacement, repair, and upgrade demand generally makes this stream steadier than new-aircraft production. Commercial original equipment grew 6%, while Defense and Space grew 3%, providing end-market balance but not eliminating aerospace cyclicality. The balance sheet is the main weakness: $15.853 billion of debt against $1.057 billion of cash creates about $14.8 billion of net debt, and stockholders' equity was negative $5.697 billion. High leverage makes supply or demand misses more consequential.

What could change the storySupply-chain repair could unlock upside; another guidance miss or debt-heavy capital returns would weaken the case.

The bull case is supply-chain recovery plus management's 2030 targets of 6%-8% organic sales growth annually, more than $6.5 billion of adjusted EBIT, and over $4.0 billion of free cash flow. The bear case is persistent shortages that keep 2026 growth near 4%-5% and pressure margins. Capital allocation matters: the board authorized up to $3.5 billion of buybacks, partly to offset equity-compensation dilution, but none had occurred when the 10-Q was filed. With substantial debt, cash-funded deleveraging would strengthen the case; debt-funded buybacks or acquisitions would weaken it.

Price checkThe post-earnings selloff lowered expectations, but the shares still do not screen as obviously cheap.

Using the latest verifiable after-hours price of $171.50, with a $170.37 regular-session close, Honeywell Aerospace is worth about $54.4 billion on roughly 317 million shares. Against 2026 adjusted EPS guidance of $7.60-$7.90, the price is about 22 times the midpoint; P/E means price divided by annual earnings per share. Adding about $14.8 billion of net debt gives an enterprise value near $69.2 billion, roughly 15.7 times the $4.4 billion midpoint of adjusted EBIT guidance. That supports a fair-priced, not bargain, view.

AI: News

Guidance reset shocks sharesHoneywell Aerospace cut 2026 growth expectations after supply constraints hurt profit, triggering a severe market selloff.

On August 5, Honeywell Aerospace reported Q2 sales of $4.522 billion, up 5%, but adjusted EPS fell 32% to $1.87. It cut 2026 organic sales growth guidance to 4%-5% from 7%-9% and adjusted EBIT guidance to $4.35-$4.45 billion. Reuters reported the shares fell as much as 26% on August 6 and were about 20% lower during its report. The timing strongly links the selloff to the earnings and guidance reset, although exact price causation cannot be proven.

Debt exchange completedNearly all of roughly $16 billion of notes were exchanged into registered securities without new proceeds.

On August 12, Honeywell Aerospace completed an exchange offer covering nine note series totaling about $16 billion of principal. Tender participation was roughly 98%-100% across the series, and the company issued registered notes with substantially identical economic terms for the tendered unregistered notes. Honeywell Aerospace received no proceeds, so this was not fresh borrowing; it mainly completed post-spin financing administration and registration. I found no reliable evidence tying a specific same-day stock move to this exchange, so market reaction should be treated as uncertain.

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Revenue

2023

2024

2025

Net income

2023

2024

2025

Free cash flow

2023

2024

2025

Total cash / debt

CashTotal debt

2024

2025

Financial statements

	2025	2024	2023
Revenue	$17.40B	$15.45B	$13.79B
Research & development	$677.0M	$567.0M	$506.0M
Operating expenses	$2.81B	$1.99B	$1.72B
Operating income	$3.26B	$3.51B	$3.56B
Operating margin	18.71%	22.72%	25.84%
EBITDA	$3.59B	$3.85B	$3.87B
EBITDA margin	20.60%	24.96%	28.03%
Net income	$1.78B	$2.82B	$2.89B
Net profit margin	10.23%	18.24%	20.93%
Basic EPSper basic share	$5.62	$8.89	$9.11
Diluted EPSper diluted share	$5.62	$8.89	$9.11

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Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of HONA
Holder	Shares held
BlackRock, Inc.	23.76M
VANGUARD CAPITAL MANAGEMENT LLC	20.69M
Invesco Ltd.	12.88M
MORGAN STANLEY	9.29M
GEODE CAPITAL MANAGEMENT, LLC	8.21M
WELLINGTON MANAGEMENT GROUP LLP	7.72M
VANGUARD PORTFOLIO MANAGEMENT LLC	7.53M
GOLDMAN SACHS GROUP INC	7.39M
FRANKLIN RESOURCES INC	6.5M
MASSACHUSETTS FINANCIAL SERVICES CO /MA/	5.01M
BANK OF AMERICA CORP /DE/	4.68M
JPMORGAN CHASE & CO	3.88M
ROYAL BANK OF CANADA	3.49M
AMERIPRISE FINANCIAL INC	3.35M
Capital Research Global Investors	3.3M
Bank of New York Mellon Corp	2.91M
UBS Group AG	2.77M
Nuveen, LLC	2.69M
NORTHERN TRUST CORP	2.65M
BARCLAYS PLC	2.3M

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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Honeywell Aerospace Inc. (HONA)

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