Honeywell Aerospace Stocks Soar on Morgan Stanley Upgrade

Honeywell Aerospace stock rallied 2.8% in pre-open trading to reach $165.20, boosted by Morgan Stanley's upgrade from Equalweight to Overweight and a price target of $205.

The analyst argued that the stock's sharp decline since its June 29 spin-off had created an attractive entry point relative to the company's long-term earnings power.

Morgan Stanley based its upgrade on valuation, noting that HONA had fallen approximately 27% since its debut while the S&P 500 gained around 5% over the same period. The stock is now trading at about 16.8 times 2028 price-to-free cash flow and 11.4 times 2028 EV/EBITDA, discounts of roughly 35% and 38%, respectively, to peer medians.

The bank's view is that this gap more than prices in near-term headwinds, with short interest declining meaningfully in recent weeks reducing the overhang of bearish positioning.