Honeywell Technologies has announced a revision to its earnings per share (EPS) guidance for 2026, now estimating between $7.90 and $8.30, which is a significant increase from the previous range of $3.95 to $4.15. This adjustment, however, results from a 1-for-2 reverse stock split that took effect on June 29, not from improved financial performance.

On Thursday, the stock of Honeywell International Inc. (HON) experienced a minor increase of approximately 0.4% to 1.6% during premarket trading, reaching prices between $221.25 and $223.77. The S&P 500 futures showed a modest rise of 0.1% at the same time.

Significance of the Update

This announcement is crucial as it highlights that the apparent doubling of EPS does not correlate with any fundamental progress in earnings expectations. Instead, it reflects a technical change due to the reduced number of outstanding shares, which fell from around 634 million to 317 million after the reverse split.

  • New EPS forecast for 2026: $7.90 to $8.30
  • Previous EPS guidance: $3.95 to $4.15
  • Number of outstanding shares post-split: 317 million
  • Wall Street current consensus EPS estimate: $10.75

Despite the misleading nature of the headline figures, analysts maintain a generally positive outlook on Honeywell. Currently, the stock is rated as a consensus Buy, although Honeywell Aerospace (HONA) has a lower Buy rate of 42%, compared to the S&P 500 average of 55-60%.

Market Reactions and Analyst Ratings

The adjustment in EPS comes amidst mixed sentiment on Wall Street, with various analysts adjusting their price targets. JPMorgan recently maintained an Overweight rating but lowered its price target to $250 on July 7. Citigroup and Deutsche Bank also adjusted their targets to $260 and $263 respectively. The average analyst target currently sits at around $257.

In terms of stock performance, HON is currently trading about 1.2% below its 50-day simple moving average, while the critical support level is noted at the 52-week low of $218.70.

Moreover, Honeywell will provide further insights into its second-quarter results during its earnings call scheduled for July 23.

What to Watch For

Investors should remain vigilant as the market adjusts to the new EPS figures and the potential impact on trading patterns. As Wall Street analysts continue to reassess their models, alg traders might react to outdated consensus figures, creating a risk for short-term volatility.

This material is for informational purposes only and is not financial advice.