Honeywell Aerospace forecasts $6.5B in earnings by 2030 after spinoff

Honeywell Aerospace forecast $6.5 billion in adjusted earnings by 2030 as it prepares to spin off from parent Honeywell International on June 29, betting a standalone structure will unlock faster growth.

"The biggest unlock for us will be around capital allocation," CEO Jim Currier said at the company's investor day in Scottsdale, Arizona. "We have so much to make that just driving capital allocation into factories, suppliers, the business itself is going to provide a tremendous return."

The aerospace and defense supplier expects full-year 2026 adjusted earnings before interest and taxes of $4.65 billion to $4.75 billion, with free cash flow in the second half of $1 billion to $1.5 billion. Sales are projected to grow 7% to 9% this year. By 2030, the company targets annual earnings of at least $6.5 billion and free cash flow exceeding $4 billion, fueled by 6% to 8% organic sales growth per year.

The separation comes after Honeywell International shares gained about 20% since June 2023, trailing the S&P 500's roughly 77% advance. The conglomerate announced plans in 2025 to split into three independent companies focused on automation, aerospace and advanced materials. Honeywell Aerospace will trade under the ticker HONA.

The company's backlog has grown to $19 billion, up 20% from a year earlier, with Currier citing "record" orders from Airbus and Boeing. Honeywell Aerospace generated $4.2 billion in profit last year on margins of 24.5%.

Supply chain constraints remain a focus for investors. The company said temporary issues tied to the Middle East conflict weighed on its engines and control systems divisions in the first quarter but have since been corrected. Jefferies analyst Sheila Kahyaoglu noted concern that Honeywell could receive less favorable treatment from critical suppliers, including castings and forgings providers, with investment levels trailing competitors such as RTX.

Currier said the company plans to invest in suppliers directly, including buying equipment for smaller providers of critical components. A March agreement with the Pentagon, RTX and Lockheed Martin to increase precision-guided munitions production requires a $500 million investment by Honeywell Aerospace — a deal Currier said would have been "very difficult" to complete as part of an industrial conglomerate.

The guidance raise signals management expects demand from commercial aviation and defense to accelerate. Investors will watch the company's first post-spinoff earnings report for evidence that the standalone structure is delivering on its promised margin and growth targets.

This article is for informational purposes only and does not constitute investment advice.