Peach Dutch Baby Pancake with Cherry Compote
['1/4 cup honey', '2 (3-inch) strips lemon peel', '1 tablespoon fresh lemon juice', '2 cups fresh (or frozen, thawed) cherries (about 1 pound), stemmed, pitted, halved', '4 tablespoons (1/2 stick) unsalted butter, divided', '4 large eggs', '3/4 cup all-purpose flour', '3/4 cup whole milk', '3 tablespoons sugar, divided', '1 teaspoon vanilla extract', '1/4 teaspoon kosher salt', '2 peaches, halved, pitted, cut into 1/4"-thick wedges', 'Powdered sugar (for dusting)']
Bring honey, lemon peel, lemon juice, and 1/2 cup water to a boil in a small heavy saucepan. Add cherries and simmer briskly, stirring occasionally, until sauce is syrupy, about 15 minutes. Transfer cherry compote to a medium bowl and chill.
Preheat oven to 425°F. Melt 2 tablespoons butter in a small saucepan; scrape into a blender. Add eggs, flour, milk, 1 tablespoon sugar, vanilla extract, and salt. Blend batter until smooth; set aside in blender.
Heat a 12" cast-iron skillet over medium heat. Add remaining 2 tablespoons butter and remaining 2 tablespoons sugar and cook, stirring constantly, until sugar starts to caramelize, about 2 minutes. Add peaches to skillet; increase heat to medium-high and cook, stirring frequently, until softened, about 2 minutes. Briefly reblend reserved pancake batter. Pour evenly over peaches and transfer to oven.
Bake pancake until puffed and golden brown all over, 17-20 minutes (it will deflate as soon as it's removed from the oven). Dust pancake with powdered sugar and serve immediately, passing cherry compote alongside.
Compote can be made 1 day ahead. Cover and chill. Remove lemon peel just before serving.
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