Honeywell downgraded at BofA on lack of visibility for longer-cycle businesses

As previously reported, BofA downgraded Honeywell (HON) to Neutral from Buy with a price target of $230, down from $250. Honeywell reported Q3 earnings that beat expectations and raised its full-year guidance on below-the-line items, but lowered its Q4 operational guidance, notes the analyst. Delays in the company’s long-cycle businesses – Process Solutions/UOP and Aerospace – drove the miss and operational cut, notes the analyst, who says the timing of the short cycle recovery remains uncertain, while long cycle performance lacks consistency. The firm, which lowered its FY25 forecast to reflect less certainty that the company will be able to hit the upper end of its long-term 4%-7% forecast, says Honeywell still has “decent assets within its portfolio” and that a new CFO in 2025 should help with messaging in addition to the portfolio transformation, but the firm believes the “turnaround will take some time.”