Honeywell International Inc. (HON) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Honeywell International Inc.

Updated on October 23, 2026 · accounts published on October 22, 2026

Reading of October 22, 2026: A cash-generative industrial with slipping margins and a stretched balance sheet

Honeywell International's P/E of 8.5× over the last 12 months rises to about 16.8× without one-off gains, which made up half of pre-tax profit.

• Is Honeywell International expensive or cheap? Without one-off gains the P/E is about 16.8×, above its 14.4× decade average and below the 26.2× sector median.
• How is the business doing? Revenue grew 7.8 % over the last 12 months, but EPS fell 15.5 % and the operating margin slipped to 13.3 % from 17.5 % in fiscal 2025.
• How strong is the balance sheet? Net debt equals 33 % of the share price (fiscal 2025), and the dividend has risen for 11 consecutive years.
• What to expect from the next earnings? Analysts expect EPS of $2.41 for the quarter reported on February 4, 2027, after 8 beats in the last 8 quarters.
• Does Honeywell International turn its margin into cash, and at what cycle multiple does it trade? Free cash flow was 114 % of net income in fiscal 2025, and cycle-adjusted EV/EBITDA of 7.0× is below its 10.2× seven-year average.

Is Honeywell International expensive or cheap?

Over the last 12 months Honeywell International trades at a P/E of 8.5×, but that figure flatters it. Half of pre-tax profit, $5,045 million, came from outside the business, such as revaluations or sales of stakes in other companies. That money is real but does not repeat every year. Without it the P/E is about 16.8×, above its ten-year average of 14.4× and still well below the 26.2× median of 407 sector peers. On the EPS analysts expect for 2027 it is 22.2×, and EV/EBITDA without those gains is 14.0×. The stock sits 56 % below its 52-week high after falling 43 % in 12 months.

How is the business doing?

Over the last 12 months revenue rose 7.8 % while EPS fell 15.5 %, so sales growth is not reaching the bottom line. The operating margin of 13.3 % sits below both the 17.2 % average of fiscal 2014-2025 and the 17.5 % of fiscal 2025, a recent drop against its own history. The 23.0 % net margin and 36.2 % ROE look strong mainly because of the one-off gains. ROIC of 7.5 % is 1.5 points below the 9.0 % median of its sector, and it topped 10 % in only 5 of the last 10 fiscal years, with a low of 3.1 % in 2017.

How strong is the balance sheet?

Net debt was $71.97 per share in fiscal 2025, $112.44 of debt less $40.47 of cash, or 33 % of the current price. Against earnings it is manageable: net debt to EBITDA of 2.7× in fiscal 2025 stays under the 3× that industrials treat as healthy. The warning signs are elsewhere. The Altman Z of 1.6 over the last 12 months is in the danger zone below 1.81, and a current ratio of 0.96 means short-term liabilities slightly exceed short-term assets. Debt to equity is 0.73. The dividend yields 2.0 %, has grown for 11 consecutive fiscal years and absorbed 63 % of fiscal 2025 profit.

What to expect from the next earnings?

On October 22, 2026 Honeywell International reported EPS of $2.27 against $2.17 expected, a 4.6 % beat, and it has topped EPS estimates in 8 of the last 8 quarters. The next results are due on February 4, 2027, with $2.41 expected for the quarter. The consensus is stable: the 2026 EPS estimate barely moved in the last 30 days, from $8.32 to $8.31 across 11 analysts, and 2026 revenue estimates are also flat. Of the 30 analysts covering the company, 20 recommend buying, 10 holding and none selling. A steady record of beats sits alongside EPS down 15.5 % over the last 12 months.

Does Honeywell International turn its margin into cash, and at what cycle multiple does it trade?

Industrials are semi-cyclical: profits swing with the cycle, so the sector is judged on order backlog, operating margin and how much profit arrives as free cash, more than on one year's earnings. Conversion is strong here: free cash flow was 114.0 % of net income in fiscal 2025, above the 85 % healthy mark, and the 17.5 % operating margin cleared the 12 % bar. The weaker points: capex of 2.6 % of revenue is below the 4 % to 8 % range, revenue per share grew 4.8 % a year in fiscal 2020-2025 against a 6 % threshold, and ROIC of 7.5 % falls short of 15 %. Cycle-adjusted EV/EBITDA is 7.0×, below its seven-year average of 10.2×.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.