By Al Root
Honeywell has a busy month. How management handles it all will make or break the stock.
On the cusp of its breakup, Honeywell Aerospace will host an investor event on Wednesday in Arizona. It kicks off next week by updating its guidance on Monday. Then, just a few days later, on June 11, Honeywell's remaining automation businesses throw an analyst event.
The separation on June 29 caps off the month.
First up is Honeywell Aerospace, which makes auxiliary power units for planes and engines for military equipment as well as electronics and software for aircraft.
Honeywell Aerospace generated 2025 sales of almost $18 billion and profit margins of about 26%. GE Aerospace, for comparison, generated 2025 sales of about $42 billion and an operating profit margin of about 21%.
The Honeywell franchise should be an attractive asset if it can grow more. It grew 3% in this year's first quarter. GE's first-quarter sales grew 25%.
"We have toured 23 [aerospace] facilities over the past six months," wrote Jefferies analyst Sheila Kahyaoglu in a preview report. "During these site tours, there has been mention of supplier issues, and Honeywell has come up."
That's a warning sign. Improving performance with its customers will be key for improving growth. And convincing investors there's a plan will be management's main job on Wednesday.
Profitability will be another focus of the analyst day, said BNP Paribas analyst Matt Ackers, also in a preview report. Margins could approach 30% in the coming years, though the company might have to reinvest some of its profit potential to improve supplier performance.
The defense outlook, impact of oil prices, aircraft production rates, aftermarket sales, and capital deployment strategies will all be on the docket, too, added Ackers.
There won't be a shortage of discussion topics. But make no mistake, sales growth in line with the industry is top of the list for Honeywell Aerospace as it approaches independence.
On Tursday, Honeywell stock was down 0.7% in early trading, then was down 1.7% by midday; the S&P 500 was essentially flat. Honeywell is up about 11% over the past 12 months, while GE Aerospace is up about 29%.
GE Aerospace trades for about 40 times earnings expected over the coming 12 months. Honeywell shares trade for about 22 times. That valuation gap is one reason Honeywell management is looking to break the company in two.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
June 02, 2026 12:05 ET (16:05 GMT)
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