Honeywell — Investment/Business Report (as of Sept 18, 2025)
Executive summary
Honeywell is reshaping into three focused platforms—Aerospace Technologies, Industrial Automation, and Energy & Sustainability Solutions—and plans to separate Automation and Aerospace after spinning its Advanced Materials unit (“Solstice Advanced Materials”) in Q4-2025, targeting all separations by 2H-2026. Q2’25 results beat guidance; FY-2025 outlook was raised. Meanwhile, majority-owned Quantinuum completed a $600M round at a $10B pre-money valuation, adding explicit “option value” to HON’s sum-of-parts. Honeywell International Inc. Honeywell Honeywell+1
Recent financials & guidance
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Q2’25: Sales $10.35B (+8% y/y; +5% organic); Adj. EPS $2.75 (+10% y/y). Segment margin 22.9%. Honeywell International Inc.
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FY-2025 guidance (raised Jul 24, 2025): Sales $40.8–$41.3B; organic growth 4–5%; segment margin 23.0–23.2%; Adj. EPS $10.45–$10.65; FCF $5.4–$5.8B. Honeywell International Inc.+1
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Portfolio actions (Q2’25 release): Closed $2.2B Sundyne acquisition; announced £1.8B Johnson Matthey Catalyst Technologies deal; completed $1.3B PPE business sale; considering strategic alternatives for Productivity Solutions & Services and Warehouse & Workflow Solutions. Honeywell International Inc.
Segment performance & demand signals (Q2’25)
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Aerospace Technologies: +6% organic; strength in defense & space (+13%) and commercial aftermarket (+7%); backlog +16%. Honeywell International Inc.
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Industrial Automation: Flat organic; Sensing & Safety +4%; pressure in European demand and W&WS projects. Honeywell International Inc.
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Building Automation: +8% organic; margin 26.2% aided by the Global Access Solutions acquisition (LenelS2, Onity, Supra). Acquisition closed Jun 3, 2024 for $4.95B. Honeywell International Inc.+2Honeywell+2
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Energy & Sustainability Solutions (UOP + Advanced Materials): +6% organic; UOP +16% on catalysts, gas processing licenses, sustainability backlog conversion. Honeywell International Inc.
Technologies, contracts, partners & customers (selected 2024–2025 items)
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Aerospace/Avionics: multi-year avionics deal with LOT Polish Airlines for its 737 MAX fleet (deliveries from 2026). Vertical Aerospace deepened a long-term pact for VX4 air-taxi flight-control systems (deal potential up to $1B over a decade). Honeywell Aerospace+1
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Quantum sensing (near-term): U.S. DoD TQS program awards—CRUISE and QUEST (MagNav)—to develop quantum-enabled navigation/magnetometry. Honeywell Aerospace+1
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Access control & smart buildings: LenelS2/Onity/Supra added at scale via Carrier deal; supports Honeywell’s Building Automation growth and cross-sell into enterprise/real-estate. Honeywell
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UOP & sustainability: Ongoing wins in petrochemical catalysts, gas processing, SAF/renewables flows highlighted in Q2 deck/PR. Honeywell International Inc.
Quantinuum (majority-owned) — why it matters to HON
Capital raise: $600M at $10B pre-money (Sept 4, 2025); new investors include NVIDIA’s NVentures, Quanta Computer, QED Investors; prior $300M round (Jan 2024) valued at $5B. Reuters+3Honeywell+3
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Tech milestones: record quantum volume on H-Series and roadmap toward fault-tolerant systems; NVIDIA CUDA-Q integration; IPO chatter 2026–2027 depending on markets. Barron's+1
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Implication for HON: clearer sum-of-parts uplift (explicit equity mark + eventual liquidity), expanded defense/industrial sensing funnels, and partnership halo with blue-chip investors (NVIDIA, JPMorgan, Mitsui, etc.). Reuters+1
Strategy & catalysts (next 6–18 months)
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Separation roadmap: Spin of Solstice Advanced Materials targeted Q4-2025, followed by separation of Automation and Aerospace; full three-company structure targeted 2H-2026. Watch for Form-10/S-1 filings, capital structures, and dividend policies. Honeywell International Inc.
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M&A integration: Sundyne and Catalyst Technologies synergy realization; cross-sell of Global Access Solutions into Building Automation. Honeywell International Inc.+1
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Aerospace cycle: aftermarket strength + defense budgets; specific avionics/air-taxi certification milestones (LOT/Vertical). Honeywell Aerospace+1
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Quantum milestones: Quantinuum “Helios” updates, large-enterprise wins, and any IPO/spin signals; policy grants/DoD-DOE awards for quantum sensing/compute. Barron's+1
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FY-2025 delivery: hitting raised guide (sales, margin, EPS, FCF). Honeywell International Inc.
Risks
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Execution on multi-step separations and integrations (Sundyne, Catalyst Tech; carve-outs). Honeywell International Inc.
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Macro cyclicality (commercial aero, industrial automation projects) and Europe demand softness. Honeywell International Inc.
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Quantum timing risk if commercialization lags expectations. (Industry-wide; mitigated by HON’s diversified earnings base.) Barron's
Valuation framing (qualitative)
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With FY-2025 Adj. EPS $10.45–$10.65, HON trades at ~19–20× on the widget price above; premium supported by high-teens segment margins, strong FCF, and portfolio catalysts. A successful Quantinuum IPO could unlock incremental value beyond core industrial comps. Honeywell International Inc.
Bottom line
Honeywell’s core cash engines (Aerospace aftermarket/defense, UOP catalysts, Building Automation) are performing, guidance is higher, and management is simplifying the portfolio while adding targeted M&A. Overlay Quantinuum’s momentum and potential IPO, and you have a blue-chip industrial with structural re-rating catalysts and a quantum call option—tempered by separation/M&A execution and quantum timing risks. Honeywell International Inc.+1
