Honeywell International reports Q1 2026 results this morning with options markets flashing the most defensive positioning seen in months.
The clearest pre-earnings signal comes from the options market. The put/call ratio jumped to 0.476 on Thursday — nearly two standard deviations above its 20-day mean of 0.40 — marking the most protective skew in recent weeks. That reading sits well above the midpoint of the 52-week range of 0.24 to 0.82, suggesting investors are buying more downside protection than usual without outright panic. The stock itself has recovered, gaining nearly 3% over the past week to close at $223.82, though it remains down about 2.6% over the past month. The borrow market is entirely relaxed: availability is essentially unlimited, and cost to borrow has eased 14% over the week to just 0.34% annually.
Short interest adds little drama to the setup. At 1.9% of the free float — up roughly 10% over the past month but still a structurally low level — there is no meaningful short thesis pressing against this stock. Days to cover run under three. Conviction among bears is thin, and the lending conditions confirm it: there is no squeeze pressure, and no rush to build new short positions heading into the report.
The analyst community broadly agrees the stock has value, though it is becoming more selective on price. Multiple firms trimmed targets in late April following the prior print — Citigroup cut to $257, Barclays to $243, and TD Cowen to $230 — while keeping Buy or Overweight ratings. The mean target of $247 implies roughly 10% upside from current levels. Bulls point to organic growth prospects and Honeywell's digital and sustainability transformation agenda. Bears flag separation-related costs, ongoing portfolio restructuring, and the company's recent history of underperforming peers — the stock fell 3.1% on the day of its last earnings release and lost another 2.6% over the following five days. Honeywell's forward earnings momentum score ranks in the 70th percentile, though EPS surprise history is weaker at the 27th percentile, a gap that keeps the debate alive.
Today's print is therefore less about whether Honeywell is growing and more about whether management can demonstrate that separation costs are tracking toward a floor and that margin guidance for the remainder of the year holds.
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