Honeywell Price Target Lifted by Morgan Stanley Amid Sector Focus

Morgan Stanley has updated its price target for Honeywell to $250, stating that the company's growth story appears clearer after its aerospace spin-off. The bank notes that the stock is already priced with high expectations, but sees room for further growth in certain sectors.

The increased target comes as Morgan Stanley highlights Honeywell's focus on Building Automation, which sells systems for managing lighting, heating, and security in commercial buildings. Research and development spending has risen to about 4.5% of pro forma 2025 sales, up from 3.5-4% five years ago.

The bank believes this 'spend, then ship more new products' playbook could translate to other sectors such as Industrial Automation and Process Automation and Technology. However, Morgan Stanley stressed that analysts are already forecasting high growth for Honeywell, with a consensus of 6% organic growth in 2027 at the top end of the company's three-year target.