Morgan Stanley Sees Honeywell Aerospace as Prime Entry Point
Honeywell Aerospace shares surged on Wednesday morning after Morgan Stanley analyst Kristine Liwag upgraded the stock to Overweight from Equal-weight, setting a price target of $205.
The upgrade follows the company's spin-off in June, which led to a significant sell-off with shares dropping around 25%.
Morgan Stanley believes this creates a prime entry point due to heavily discounted valuation multiples. HONA is now the cheapest large-cap aerospace name in its coverage, trading at approximately 16.8x estimated 2028 price-to-free-cash-flow and 11.4x 2028 EV/EBITDA, discounts of 35% and 38% relative to aerospace peer medians.
Honeywell Aerospace posted second-quarter sales of $4.52 billion, up 5% organically, alongside an $18.2 billion order backlog in its inaugural quarterly earnings report as an independent company on August 5.