Strength in Aerospace Segment Drives Honeywell: Can the Momentum Sustain?

Honeywell International Inc. HON is benefiting from persistent strength in the Aerospace Technologies segment. Organic revenues from the segment increased 12% year over year in the third quarter of 2025, constituting more than 43% of its business. Also, in the first and second quarters, organic revenues from this market increased 9% and 6%, respectively.

The top-line results were driven by sustained strength in its commercial aviation aftermarket business, due to solid demand in the air transport market and supply-chain improvements. After witnessing an increase of 15% and 7% in the first and second quarter of 2025, respectively, organic sales from its commercial aviation aftermarket business surged 19% year over year in the third quarter. Also, recovery in the commercial aviation original equipment (OEM) business due to improved production and reduced customer destocking bodes well.

Strong momentum in Honeywell’s defense and space business, owing to stable U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, has also been proving beneficial. 

With both commercial and military aircraft programs expected to continue benefiting from strength in air travel and defense budgets, HON is poised to maintain strong demand momentum in the quarters ahead. For 2025, it expects organic sales in the Aerospace Technologies segment to be up in the high-single-digit to low double-digit range, driven by continued momentum in both commercial aviation and defense and space businesses.

HON's Peers in the Aerospace Market

Among its major peers, Howmet Aerospace Inc.’s HWM defense aerospace market is playing an important role in driving its overall growth. In the third quarter of 2025, Howmet’s revenues from the defense aerospace market jumped 24% 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.

Its another peer, RTX Corporation RTX is benefiting from strength in the commercial aerospace market, with growth in both aftermarket and OEM verticals. RTX reported 11.9% sales growth in the third quarter, driven by solid momentum in the Collins Aerospace and Pratt & Whitney segments. Rising aircraft utilization and demand for sustainable technologies are supporting RTX Corp.’s growth.

HON's Price Performance, Valuation and Estimates

Shares of Honeywell have lost 16.8% in the past year compared with the industry’s decline of 5.5%.

From a valuation standpoint, HON is trading at a trailing price-to-earnings ratio of 18.11X, above the industry’s average of 16.56X. Honeywell carries a Value Score of C.

The Zacks Consensus Estimate for HON’s 2025 earnings has inched up 0.8% over the past 30 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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