Honeywell rated Buy on strong order growth, margin gains, and software revenue boost

Honeywell Technologies is rated Buy due to its strong 16% year-over-year order growth in Q2 2026, which outpaces its 4% sales growth and suggests future revenue acceleration as backlog converts. The company is successfully implementing cost reductions and portfolio simplifications, aiming for segment margins above 22% by the end of FY26 with further improvements expected in 2027. Honeywell Forge, its software platform, is driving recurring software revenue growth, targeting software and services to make up over 45% of sales, enhancing the company's resilience and profit margins. These factors position Honeywell as an attractive investment opportunity with potential for sustained growth and margin expansion.