Risk Reward Update

Research evidence excerpt

Risk Reward Update

Performance Current Stock Price Price Target Self-help: Positive

Technology Diffusion: Positive

Source: Refinitiv, Morgan Stanley Research, Morgan Stanley Institutional Equities Division. The probabilities of our Bull,

Base, and Bear case scenarios playing out were estimated with implied volatility data from the options market as of 13 View descriptions of Risk Rewards Themes here

Jul 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either

three-months’ or one-years’ time. View explanation of Options Probabilities methodology here

BULL CASE $285.00 BASE CASE $245.00 BEAR CASE $185.00

~24x our Bull Case blended '27/'28 EPS of ~22x our Base Case blended '27/'28 EPS of ~20x our Bear Case blended '27/'28 EPS of

$10.77 $9.62 $7.67

Forecast MSD+ organic growth in 2027 Base case assumes ~4% organic growth Model ~LSD organic growth through 2028,

behind a sharper recovery in HON shortcycle through 2028, driven by recovery in materially below 4-6% target. We model

business lines. Forecast calls for shortcycle end markets (MSD declines to short-cycle businesses flat in 2026 as

incrementals in the high-30%+ range + LSD growth). We model healthy margin unfavorable end market mix brings activity

additional tailwind from productivity expansion through 2028 on mix tailwinds declines & extends channel destock. We

actions. With HON delivering MSD+ organic and productivity actions. PT based on ~22x model OM roughly flat through out years as

growth and M&A optionality, we see our blended '27/'28 EPS, a HSD% premium volume softness limit limits upside. Value at

rerating potential and value shares at ~24x, to the S&P 500. ~20x EPS, as slowing growth drives derating

a LDD S&P 500 premium.