Inner Circle

Posted on | by Leon Hinde | Leave a Comment on Inner Circle

Zscaler, Inc. – Common is expected to report its fiscal third quarter (Q3) 2026 earnings on 28 May. Investors will likely focus on whether the company can maintain its record-high non-GAAP operating margins (22.4% in Q2).

AI Security Growth: Updates on the “AI-driven security moat” and transaction volume. Acquisition Integration: Performance of the recently acquired Red Canary.

Analyst Expectations

  • Estimated EPS: ~$1.00 – $1.01
  • Estimated Revenue: ~$831 million – $836 million

Last Earnings Recap (Q2 FY2026)

  • Report Date: February 26, 2026
  • Results: Zscaler reported a strong beat with an EPS of $1.01 (vs. $0.89 expected) and revenue of $815.75 million (vs. $798.33 million expected).
  • Guidance: Following the Q2 report, the company raised its full-year fiscal 2026 revenue guidance to approximately $3.32 billion.

US Earnings

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Earnings spotlight: Monday, April 27: Verizon.

Earnings spotlight: Tuesday, April 28: Visa, Coca-Cola, Starbucks.

Earnings spotlight: Wednesday, April 29: Alphabet, Microsoft, Meta, AbbVie, Qualcomm, Ford.

Earnings spotlight: Thursday, April 30: Apple, Eli Lilly, Merck, Mastercard.

Earnings spotlight: Friday, May 1: Exxon Mobil, Chevron.

Inner Circle

Posted on | by Leon Hinde | Leave a Comment on Inner Circle

Honeywell International Inc. – Common is currently a “transformation play.” While near-term revenue headwinds and supply chain issues are weighing on the stock, the June 29 Aerospace spin-off is the primary catalyst we’re watching.

Q1 2026 Earnings Highlights (Released April 23, 2026)
Honeywell reported mixed results for the first quarter of 2026:

  • Adjusted EPS: $2.45, beating the analyst consensus of $2.32 (up 11% year-over-year).
  • Revenue: $9.14 billion, missing the estimated $9.30 billion. Organic sales growth was 2%, slowed by mechanical supply chain constraints in Aerospace and geopolitical disruptions in the Middle East.
  • Margins: Segment margins expanded 90 basis points to 23.3%, driven by strong pricing discipline and cost removals.
  • Backlog: Rose 15% to a robust $38 billion, indicating strong future demand.

Strategic Catalyst: The Aerospace Spin-Off
The biggest upcoming driver for HON is the planned separation of its Aerospace business:

  • Spin-Off Date: Scheduled for June 29, 2026.
  • Objective: To create two “pure-play” companies: one focused on Aerospace Technologies and the other (RemainCo) on Industrial/Building Automation and Energy.
  • Divestitures: Honeywell also recently announced the sale of its Warehouse and Workflow Solutions (WWS) and Productivity Solutions and Services (PSS) businesses, expected to close in the second half of 2026.

Fundamental Metrics & Valuation

  • Price-to-Earnings (P/E) Ratio: ~26.5x (Trailing).
  • Forward P/E: ~19.6x.
  • Dividend Yield: ~2.27% ($4.76 annualized).
  • Full-Year 2026 Guidance:

* Sales: $38.8B – $39.8B (3-6% organic growth).
* Adjusted EPS: $10.35 – $10.65.
* Free Cash Flow: $5.3B – $5.6B.

Analyst Outlook

  • Consensus: “Moderate Buy” with 13 Buy ratings and 8 Hold ratings.
  • Price Targets: Analysts have a median target of $245.00 – $250.21, implying a potential upside of roughly 15-20% from current levels.
  • Recent Changes: Following the revenue miss, firms like Citigroup and Barclays slightly lowered their price targets (e.g., Citi from $265 to $257) but maintained “Buy/Overweight” ratings, citing long-term value in the portfolio breakup.