Will Strength in Aerospace Technologies Continue to Drive HON's Growth?

Honeywell International Inc. HON is witnessing robust momentum across its Aerospace Technologies segment, supported by strength in the commercial aviation aftermarket and defense & space businesses. The segment’s organic sales grew 6% year over year in the second quarter of 2025.

Solid demand in the air transport market and supply-chain improvements are benefiting the commercial aviation aftermarket business. After recording 15% year-over-year organic sales growth in the first quarter, the business continued its strong performance with a 7% increase in the second quarter.

Stable U.S. and international defense spending volumes and sustained demand from the current geopolitical climate have contributed to the growth of the defense and space business. Organic sales for the defense and space business climbed 10% year over year in the first quarter of 2025, while the same surged 13% year over year in the second quarter.

In the near term, Honeywell expects strong demand in commercial aviation, growth in air transport flight hours, higher shipset deliveries and strong defense spend volumes to support the Aerospace Technologies segment’s performance. In 2025, HON projects organic sales in the Aerospace Technologies segment to be up in the high single digits. Continued momentum in both commercial aviation and defense and space businesses positions the segment for long-term growth as well.

Segment Snapshot of HON’s Peers

Among its major peers, GE Aerospace GE is riding on the solid demand for LEAP, GEnx & GE9X engines and services within the Commercial Engines & Services business. Revenues from GE Aerospace’s Commercial Engines & Services business jumped 30% year over year in second-quarter 2025. This growth is supported by increasing air traffic, fleet renewal and expansion activities. During the second quarter, GE Aerospace inked a deal with Qatar Airways to supply more than 400 GE9X and GEnx engines. It represents the largest widebody engine deal in the company’s history.

Another peer, 3M Company’s MMM, Transportation and Electronics segment has been benefiting from strength in the transportation and aerospace end markets. Solid momentum in the electronics, aerospace and defense, personal auto and commercial graphics markets, driven by demand for new products and expanding sales coverage, is proving beneficial for 3M’s segment as well. In the second quarter of 2025, 3M’s segment’s adjusted organic revenues grew 1% year over year.

HON's Price Performance, Valuation and Estimates

Shares of Honeywell have gained 3.3% in the past year against the industry’s decline of 1.6%.

From a valuation standpoint, HON is trading at a forward price-to-earnings ratio of 18.86X, above the industry’s average of 16.31X. Honeywell carries a Value Score of D.

The Zacks Consensus Estimate for HON’s 2025 earnings has increased 1.1% 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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