BofA Securities upgraded Honeywell Technologies' rating to Neutral from Underperform and increased its price target to $265 from $205, citing improved execution and broad-based order momentum that bolster confidence in the company's growth trajectory for the remainder of the year.
The broker's change of stance follows Honeywell's second-quarter performance, which outpaced expectations across all three of its business segments. Management subsequently raised full-year 2026 guidance for organic growth, segment margins and adjusted earnings per share, moves that BofA said eased earlier concerns tied to aerospace-related execution, inconsistent operational performance and limited growth visibility.
Quarterly results and guidance
Honeywell reported adjusted second-quarter earnings per share of $1.95, ahead of BofA's $1.74 estimate, on revenue of $5.18 billion, which also exceeded forecasts. The company lifted its full-year outlook to 3%-4% organic growth, segment margins of 20.1%-20.5% and adjusted EPS of $8.05-$8.35. Management is forecasting 4%-6% organic growth in both the third and fourth quarters.
Orders, backlog and segment breadth
BofA highlighted accelerating orders as a primary positive. Total orders grew 16% organically to $5.7 billion, book-to-bill topped 1.1x, and backlog increased by 9%. The brokerage noted the strength was broadly distributed across Building Automation, Industrial Automation and Process Automation & Technology, which it said improves visibility into an expected second-half acceleration and into 2027 growth.
Model changes and outlook
Reflecting the results and the order strength, BofA raised its 2026 adjusted EPS estimate to $8.25 from $8.05. The firm cited expectations for stronger execution, margin improvement and faster conversion of backlog into revenue as supporting factors for higher earnings. At the same time, BofA acknowledged that execution risks persist, even as the company has addressed several of its earlier operational concerns.
Bottom line
BofA's upgrade and price-target increase follow a quarter in which Honeywell beat estimates, improved its full-year guidance and showed broad-based order gains. The brokerage now projects higher 2026 adjusted EPS and is more confident in second-half acceleration, while still noting that execution remains an area to monitor.