Honeywell International (NASDAQ:HON) executive Jim Currier discussed the company’s Aerospace business ahead of its planned separation into a standalone public company, highlighting portfolio breadth, end-market demand, and financial priorities as the unit moves toward an expected third-quarter 2026 completion timeline.
Separation timeline and investor messaging
Currier said the filing of the Form 10 was a “major milestone” that puts Honeywell Aerospace on a path toward completing the separation in 3Q 2026. He also pointed to an upcoming investor day scheduled for June 3 in Phoenix, Arizona.
Currier also framed the business as innovation-driven and technologically differentiated, supported by what he described as a near best-in-class operating system and “strong financial strength,” which he said positions the company to create long-term shareholder value.
2026 growth outlook by end market
Currier said Honeywell Aerospace is guiding to high single-digit growth for full-year 2026. He broke that outlook into three areas:
- Commercial original equipment (OE): high single-digit growth in 2026
- Commercial aftermarket: mid-single-digit to high single-digit growth
- Defense: high single-digit to low double-digit growth
He said the business mix is roughly 60% commercial and 40% defense, and that the company does not see defense demand waning. Currier also described typical seasonality, noting that after a strong fourth quarter the business often sees a slower start in January and February before ramping in March, which he said is occurring this year as well.
Defense demand, missiles exposure, and capacity investment
Currier attributed defense strength to heightened geopolitical conflict and what he characterized as more than 20 years of underinvestment in mission and operational readiness. He said this is driving increased spending on spares, repair, and overhaul for fixed-wing and rotary-wing aircraft among the U.S. and NATO allies.
On missiles and munitions, Currier said underinvestment in stockpiles, combined with current usage, is driving increased production needs. He said Honeywell has navigational products on “every single” precision-guided missile or munition, and cited examples including GMLRS, AMRAAM, PAC-3 Patriot, THAAD, Tomahawk, PrSM, LRASM, JDAM, and JASSM. He also said Honeywell content can extend beyond navigation to include electromechanical actuation, electronic warfare capability, seekers, flight control systems, and radar altimeters.
Asked whether ramps in missile production could involve doubling, tripling, or quadrupling output, Currier said Honeywell’s expectations are “directly in line” with those kinds of increases depending on the platform. He described the company as “really a commercial company that happens to sell commercial products into the defense segment,” arguing that this model allows Honeywell to self-fund development and factory capitalization and respond more quickly to demand changes.
Currier said additional capacity investment is required but has already been incorporated into plans reflected in the Form 10. He added that the company has invested “well north of $1 billion” over the last couple of years to increase resiliency and output across the supply base through dual sourcing, multi-sourcing, in-sourcing, in-shoring, and supplier support. He said a “big portion” of that investment was tied to missiles and munitions capacity and that such spending is expected to continue.
Space portfolio and international defense strategy
Currier said Honeywell Aerospace’s “pure play space” business represents about a mid-single-digit percentage of total revenue. He said the company participates in areas such as “Golden Dome,” interceptor programs, satellite stabilization for ISR reconnaissance, and optical communications, focusing on higher-end, government-oriented programs. He said Honeywell does not target the low-end commercial satellite market because its radiation-hardened equipment is designed for long-duration missions lasting 15 to 40 years. He also cited Honeywell’s content on Orion, including avionics, flight control systems, navigational products, and flight control computers.
Responding to a question about the changing defense landscape and new entrants such as drone-focused companies, Currier said Honeywell does not plan to manufacture drones but is working with entrants by providing integrated systems needed for missions—particularly in medium to high-end platforms. He highlighted Honeywell’s approach of “develop once and deploy everywhere,” saying the company avoids bespoke, platform-specific core technology to maintain development speed.
Currier also emphasized growth in international defense, noting that about a third of Honeywell’s defense revenue is international and not foreign military sales, but direct sales to ministries of defense, NATO allies, and international primes. He said Honeywell has more than 1,000 engineers in the EU focused on developing non-ITAR technology. He cited the 2024 acquisition of Civitanavi as aligned with this strategy, pointing to non-ITAR navigation technology and scaling in-region. Currier said he sees potential for joint ventures in Europe with major defense primes over time.
Margins, capital allocation, and leverage targets
On profitability, Currier said Honeywell Aerospace expects modest year-over-year margin improvement in 2026 versus 2025, supported by volume leverage, pricing and cost actions, and the tapering of integration costs from the CAES and Civitanavi acquisitions completed in late 2024. He said offsets include mix headwinds from faster-growing commercial OE and defense, noting commercial OE can be margin dilutive.
Currier described post-separation capital allocation priorities as:
- Investment for growth (including new products, services, supply base, and capital projects)
- Dividends (aligned with peers)
- M&A (bolt-on and tuck-in, with a focus on high-growth, accretive, technology-oriented targets)
- Opportunistic share repurchases
He said the company invests more than 4% of sales in self-funded R&D and receives customer funding equivalent to about 6% of revenue, for roughly 10% total reinvestment into technology and product development. He also said that in 2025 the business reinvested more than $1.7 billion in new technology, products, and services, adding that over the last three years the company secured more than $90 billion in lifetime value wins.
Currier said Honeywell Aerospace expects to exit separation with a gross leverage ratio “just north of three,” with a long-term goal of about 2.5x and a commitment to maintaining an investment-grade rating. On incentives, he said executive compensation design will ultimately be determined by the board, but said it will be performance-driven and broadly in line with Honeywell’s current practices.
About Honeywell International (NASDAQ:HON)
Honeywell International Inc is a diversified, publicly traded multinational conglomerate (NASDAQ: HON) that designs and manufactures a wide range of commercial and consumer products, engineering services and aerospace systems. The company operates through major business platforms that historically include Aerospace; Building Technologies; Performance Materials and Technologies; and Safety and Productivity Solutions. Its portfolio spans avionics and propulsion systems, building controls and HVAC equipment, process technologies and advanced materials, industrial automation software, and personal protective equipment and scanning solutions.
Honeywell’s aerospace business supplies aircraft manufacturers and operators with engines and auxiliary power units, avionics, flight safety systems and aftermarket services.
