Honeywell's Aerospace Business Will Deliver Strong Growth in 2024

In our view, Honeywell is one of the stronger multi-industry firms in operation today. We think the company has successfully pivoted to capture multiple ESG trends, including energy efficiency, emissions reduction, and e-commerce. We predicate our long-term thesis on overall increases in demand for warehouse automation solutions despite tough 2023 comps in that busines, new digital offerings that promote data analytics in powerplants, remote security management, energy savings in building solutions, and the broader commercial aerospace recovery. Over the next five years, we think Honeywell is capable of mid-single-digit top-line growth, incremental operating margins in the high 20s to low 30s, 9%-10% adjusted earnings per share growth, and free cash flow margins in the midteens.