Company DCF analysis file
Honeywell DCF Analysis
A Honeywell DCF must first identify the business being valued. The FY2025 historical continuing group still included Aerospace and then-consolidated Quantinuum, while the later retained issuer is an automation business. Historical conglomerate cash cannot establish the retained company’s future conversion.
Revenue, expenses and profit on one annual basis
Historical Honeywell consolidated comparison, $ millions: FY2024 ended 2024-12-31 and FY2025 ended 2025-12-31. These annual periods are separate from the later interim observation below.
| Measure | FY2024 | FY2025 |
|---|---|---|
| Historical continuing-group net sales | 34,717 | 37,442 |
| Cost of products and services | 21,360 | 23,613 |
| Research and development | 1,454 | 1,812 |
| Selling, general and administrative | 5,235 | 5,450 |
| Goodwill impairment | 0 | 724 |
| Assets-held-for-sale impairment | 219 | 270 |
| Interest and financial charges | 1,048 | 1,344 |
| Continuing income before taxes | 6,244 | 5,476 |
| Continuing net income before noncontrolling attribution | 4,995 | 4,468 |
| Total net income including discontinued operations | 5,740 | 4,772 |
Source: Annual financial statements. Annual values are reported unless a row is marked derived.
The listed annual expenses are selected rows; the statement also has other income. Pretax income is not labelled operating income, and total net income includes discontinued operations. The table converts the SEC XBRL dollar amounts into millions without changing the reported population. A later retained-automation forecast needs its own cost base.
Historical product and service sales are not the retained automation segments
| Reported historical revenue, $ millions | FY2024 | FY2025 |
|---|---|---|
| Products | 22,841 | 24,515 |
| Services | 11,876 | 12,927 |
Source: Annual business disclosures and financial notes. Annual values are reported unless a row is marked derived.
The rows reconcile the old annual group and must not be relabelled Building Automation, Process Automation and Technology, and Industrial Automation. The current perimeter also reflects acquisitions, disposals and the deconsolidation of an investment. Keep those dates and any stranded parent cost beside the business-specific growth assumptions.
Reconcile reported cash before forecasting investor cash
| Measure | FY2025 |
|---|---|
| Historical continuing operating cash | 6,075 |
| Continuing capital expenditures: positive deduction | 986 |
| Continuing cash after capex: derived | 5,089 |
Source: Annual cash-flow statement and related notes. Annual values are reported unless a row is marked derived.
Historical continuing cash after capex is 6,075 minus 986 = $5,089 million. In the separately dated Q3 2026 retained-business reconciliation, operating cash607 minus capex77 equals530, while adding back158 of separation payments gives issuer adjusted FCF688. The adjustment does not undo a cash payment, and the quarterly population is not the annual historical group.
The later interim period stays separate
| Observation | Period-specific evidence |
|---|---|
| Reported period basis | Q3 2026 covers 2026-07-01 through 2026-09-30 and was released 2026-10-22. Revenue was $4,994 million in this quarter. |
| Interpretation boundary | The annual revenue series includes the historical Aerospace business and is not revenue for the retained 2026 automation group. The newer quarter's genuine GAAP operating income also differs from the segment-profit tag; continuing cash and free cash flow adjusted for separation payments require their own bridges. |
Source: official reporting for the stated period. The dated quarter is not annualized here and is not added to either full-year column. Later reporting must be checked before refreshing the valuation date.
Turn the statements into a DCF operating case
Start the retained-automation forecast from its own project and aftermarket economics. Reconcile operating taxes, noncash charges, working capital and required investment on that scope. Remove or add businesses at actual transaction dates, retain shared costs that do not leave with a disposal, and separate transaction funding from recurring operations. The current issuer, reverse split and dated share/debt basis also require a matching equity bridge.
| Driver | Evidence to carry into the forecast | Downside condition to test |
|---|---|---|
| Automation projects | Award, engineering/procurement and billing milestones | Cash spending precedes slower customer collections |
| Aftermarket activity | Paid service demand on active installed systems | Recurring demand is assumed without service attachment evidence |
| Separation perimeter | Retained costs, acquired operations and transaction cash | Old Aerospace margin or cash is carried into retained automation |
Compare delayed project billing with a separate delay in removing shared costs. The first changes working-capital funding, while the second changes retained profitability. A single blended cash margin hides those different effects; neither historical $5.089billion cash nor adjusted quarterly FCF supplies an unchanged forecast.
Use the Honeywell financial analysis for the broader operating context, the company forecast to state the operating assumptions, and the DCF calculator only after defining the investor cash stream. Keep the statement definitions, reporting dates and your own assumptions visible when comparing valuation cases.
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