A Compelling Entry Point; Upgrade to Overweight

Research evidence excerpt

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M

Idea

August 19, 2026 04:01 AM GMT

Morgan Stanley & Co. LLC

Honeywell Aerospace Inc | North America

Kristine T Liwag

Equity Analyst

A Compelling Entry Point;

Upgrade to Overweight

Jason T Holcomb

Research Associate

Justin M Lang

Equity Analyst

What’s Changed

Honeywell Aerospace Inc (HONA.O)

From

To

Rating

Equal-weight

Overweight

Gabrielle Knafelman

Research Associate

Shaina C Zuber

After a ~27% stock price decline since the spin, HONA is now the

cheapest large cap aerospace stock in our coverage at ~16.8x

2028E P/FCF and ~11.4x 2028E EV/EBITDA. We believe the

discount more than reflects near-term execution risk. Upgrade to

OW / maintain PT of $205.

Research Associate

Kyle Benvenuto

Research Associate

Honeywell Aerospace Inc (HONA.O, HONA US)

Aerospace | United States of America

standalone quarter results reset near-term expectations.

Stock Rating

Industry View

Price target

Shr price, close (Aug 18, 2026)

Mkt cap, curr (mm)

52-Week Range

The stock now trades at the lowest 2028E EV/EBITDA and P/FCF multiples

Fiscal Year Ending

among the large cap aerospace names in our coverage.

EPS ($)**

Prior EPS ($)**

P/E

EPS ($)§

Div yld (%)

Key Takeaways

HONA shares have declined ~27% since the spin as the Investor Day and its first

We continue to expect HONA revenue growth to lag peers, but we believe the

current valuation more than compensates investors for those considerations.

Strategic value could provide a floor for valuation considering Aerospace &

Defense end markets are robust.

We upgrade HONA to Overweight from Equal-weight and maintain our PT of

$205, representing ~28% upside. Risk-reward skews positive at ~7x.

Overweight

Attractive

$205.00

$160.76

$50,942

$297.50-150.03

12/25 12/26e 12/27e 12/28e

7.73

7.75

20.7

7.71

0.7

9.34

17.2

8.94

1.5

10.47

15.4

10.18

1.7

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

e = Morgan Stanley Research estimates

Quarterly EPS ($)

2026e 2026e

Prior Current

2027e 2027e

Prior Current

Quarter

2025

…