Honeywell Expects 3%-6% Revenue Growth With Strong Aerospace, Flattish Process Markets
CEO Vimal Kapur said U.S. demand in 2026 remains steady with aerospace and building automation very strong, while energy and process markets face softer short-cycle investment. Honeywell expects 3%–6% revenue growth driven by double-digit backlog gains, 3%–4% pricing inflation and R&D levels near 4.8%–4.9% of sales.
1. U.S. Demand Trends
CEO Vimal Kapur said U.S. demand in 2026 remains steady, with aerospace and building automation described as very strong, while the energy sector and process markets face softer short-cycle investment. Industrial automation in North America performs extremely well, offset by flat to slightly negative exposure in Europe and China.
2. 2026 Guidance and Backlog
Honeywell projects 2026 revenue growth of 3% to 6% assuming stable short-cycle demand, driven by long-cycle orders and backlog up double digits which should shift revenue toward a larger second half. The company expects industrial pricing inflation of 3% to 4% and plans R&D spending near 4.8%–4.9% of sales.
3. R&D Spending and Spin-Off Plans
R&D investment remains at median industry levels around 4.8%–4.9% of sales with minimal margin impact, while a planned third-quarter spin-off focuses on removing stranded costs within 12–18 months. Honeywell will prioritize debt reduction to maintain its investment-grade rating, and the pension is overfunded by nearly 40%.