Honeywell International (HON) is "well-positioned" to report a beat-and-raise during its Q2 earnings and provide "decent" Q3 guidance that brackets consensus, BofA Securities said in an earnings preview Monday.
The brokerage said it expects any positive revisions to guidance to drive Honeywell shares higher, noting that the stock still trades at a discount to its peers.
The investment firm highlighted that Honeywell's conservative outlook for 2025 now looks increasingly cautious given recent macro and channel checks.
"We think short-cycle collapse is unlikely," BofA said, adding that its intra-quarter meetings with the company indicated broad confidence in the business.
Regarding Honeywell's recent mergers, acquisitions and divestitures, BofA estimated these actions have structurally added about 70 basis points of growth to the overall Honeywell portfolio and 110 basis points to the Honeywell Automation segment.
For Q2, BofA expects earnings per share of $2.65, reflecting 1.7% organic growth and a 10 basis-point margin contraction, mainly driven by aerospace integration.
The firm maintained its buy rating on Honeywell and raised its price objective to $275 from $250, citing an undemanding valuation relative to industrial peers.
Price: 238.04, Change: +2.11, Percent Change: +0.89
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