Honeywell Witnesses Rise in Defense Sales: Can the Momentum Sustain?

Honeywell International Inc. HON is benefiting from strong momentum in its defense and space business. In the second quarter of 2025, the company’s organic revenues from the defense and space business jumped 13% year over year, supported by an elevated global demand environment. The surge in revenues was fueled by robust orders across Europe and parts of Asia, including Korea.

This uptick significantly benefited Honeywell’s Aerospace Technologies segment, which reported 6% year-over-year organic revenue growth in the second quarter. With military-aircraft programs expected to benefit from increased funding, HON is poised to maintain strong demand momentum in the quarters ahead.

It’s worth noting that in July 2025, the House of Representatives passed the fiscal year 2026 Defense Appropriations Act, providing a total discretionary allocation of $831.5 billion. Such robust budgetary provisions set the stage for Honeywell, which remains focused on the defense and space business, to win more contracts, which is likely to boost its top line.

The boost in defense funding enhances HON’s ability to secure new contracts. Backed by consistent government support and supply-chain improvements, the company’s defense and space business is well-placed for growth in the quarters ahead.

Segment Snapshot of HON’s Peers

Among its major peers, Textron Inc.’s TXT defense business is gaining momentum, backed by key U.S. military contracts and steady government support. To this end, it is imperative to mention that in the second quarter of 2025, Textron’s Bell segment signed a contract with the Tunisian Air Force for 12 SUBARU Bell 412EPXs, while Textron Aviation partnered with Thai Aviation Industries to support the Royal Thai Air Force.

It's another peer, Howmet Aerospace Inc.’s HWM defense aerospace market is also playing an important role in driving its overall growth. In the second quarter, Howmet’s revenues from the defense aerospace market jumped 21% year over year, which accounted for 17% of its total sales. The surge in revenues was fueled by robust demand for Howmet’s engine spares, particularly related to the F-35 program, and an increase in orders for new builds and legacy fighter jet parts.

HON's Price Performance, Valuation and Estimates

Shares of Honeywell have gained 8.6% in the past year compared with the industry’s growth of 1.9%.

From a valuation standpoint, HON is trading at a forward price-to-earnings ratio of 20.09X, above the industry’s average of 16.89X. Honeywell carries a Value Score of D.

The Zacks Consensus Estimate for HON’s 2025 earnings has increased 1.4% over the past 60 days.

Honeywell currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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