BofA upgrades Honeywell Technologies to Neutral after strong quarter, lifts PT

Investing.com -- BofA Securities upgraded Honeywell Technologies to Neutral from Underperform and raised its price target to $265 from $205, saying stronger execution and broad-based order growth have improved confidence in the company's second-half growth outlook.

The brokerage's more constructive stance follows Honeywell Technologies' second-quarter results, which exceeded expectations across all three business segments and prompted management to raise its full-year 2026 guidance for organic growth, segment margins and adjusted earnings per share. BofA said the results eased its previous concerns over aerospace-related execution, inconsistent operational performance and limited growth visibility.

Honeywell reported adjusted second-quarter EPS of $1.95, ahead of BofA's $1.74 estimate, on revenue of $5.18 billion, also above forecasts. The company lifted its full-year outlook to 3%-4% organic growth, 20.1%-20.5% segment margins, and adjusted EPS of $8.05-$8.35, while forecasting 4%-6% organic growth in both the third and fourth quarters.

BofA highlighted accelerating orders as the key positive, with total orders rising 16% organically to $5.7 billion, book-to-bill exceeding 1.1x, and backlog increasing 9%. The brokerage said the strength was broad-based across Building Automation, Industrial Automation, and Process Automation & Technology, improving visibility into the expected second-half acceleration and 2027 growth.

The brokerage raised its 2026 adjusted EPS estimate to $8.25 from $8.05 and expects stronger execution, improving margins and faster backlog conversion to support earnings. While it acknowledged execution risks remain, BofA said management's conservative initial guidance leaves room for further positive revisions later this year.

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