Honeywell International Inc. (NASDAQ: HON)
Company Overview Honeywell reported Q3 2025 earnings yesterday that beat Wall Street expectations with adjusted EPS of $2.82 versus estimates of $2.57, while revenue rose 7% year-over-year to $10.41 billion, beating expectations of $10.14 billion. The stock is soaring today following the impressive results, with management raising its full-year adjusted EPS guidance to $10.60-$10.70, up from $10.45-$10.65, and organic sales growth guidance to approximately 6%, up from the prior range of 4-5%.
What makes Honeywell particularly compelling is the incredible 22% year-over-year increase in orders, resulting in a book-to-bill ratio of 1.1, meaning the company is taking in orders more quickly than it can fulfill them. The company reported a total record high backlog of $39.1 billion due to the 22% increase in orders, providing exceptional revenue visibility and validating long-term customer demand across critical industrial sectors. Honeywell confirmed the spin-off of Solstice Advanced Materials for October 30, 2025 (next week), followed by the planned separation of its Aerospace Technologies business in the second half of 2026.
Key Technical and Fundamental Drivers
Massive Earnings Beat → 10% Above Estimates Honeywell’s adjusted EPS of $2.82 easily beat Wall Street’s estimate of $2.56, representing a 10.16% earnings surprise, with the company’s adjusted EPS also increasing 9% year-over-year from $2.58.
Record Backlog → $39.1B Orders Orders increased by 22% year-over-year, helping Honeywell achieve a new record backlog of $39.1 billion, with double-digit order growth realized in all four segments including Aerospace Technologies, Industrial Automation, Building Automation, and Energy & Sustainability Solutions.
Aerospace Dominance → 12% Organic Growth Aerospace Technologies delivered 12% organic sales growth, validated by a 19% surge in the high-margin commercial aftermarket sector, with the segment reaching $4.51 billion in quarterly sales.
Three-Way Breakup → Value Creation Honeywell is accelerating its major strategic portfolio realignment with the Solstice spin-off on October 30, 2025, and the Aerospace separation in H2 2026, creating three independent, industry-leading focused companies.
Quantum Computing Moonshot → $10B Valuation Quantinuum, Honeywell’s quantum computing venture, successfully raised over $600 million at a $10 billion pre-money valuation, doubling its prior 2024 valuation, with investments from NVIDIA and Quanta Computer to support advancement of quantum computing at scale.
Market Takeaway Honeywell’s planned three-part breakup should be a value-creating event for shareholders, as the spins will allow each of the three new entities to operate in a more focused and efficient manner, with management proving to be effective operators. Building Automation achieved strong 7% organic growth while simultaneously expanding its segment margin by 80 basis points to an elite 26.7%, highlighting operational excellence and a leading position in smart building solutions.
CFO Mike Stepniak noted that “pricing will become stronger next year and a lot of that is really driven just by tariffs stabilizing and that picture on inflation being much more clear,” providing confidence in margin expansion opportunities for 2026. The receipt of the $1.6 billion Resideo indemnification termination payment significantly de-risks a major legacy liability, complementing the ongoing aggressive portfolio separation strategy.
Wall Street analysts maintain a “Moderate Buy” consensus rating with an average price target of $250.27, representing a potential 21.13% upside from current levels. CEO Vimal Kapur emphasized that “we are going into the final quarter of 2025 from a position of strength,” with raised guidance demonstrating strong underlying core business performance despite the imminent Solstice spin-off.
The convergence of multiple catalysts – record backlog providing revenue visibility, the imminent Solstice spin-off next week, a quantum computing stake now valued at $10 billion, and 22% order growth across all segments – positions Honeywell as one of the most compelling industrial plays heading into year-end. With the Aerospace separation creating three focused pure-plays in 2026 and management executing flawlessly on operational improvements, this stock offers both near-term momentum and long-term value creation.