Morgan Stanley Sees Undervalued Opportunity in HONA Stock

Honeywell Aerospace's stock price surged nearly 9% after Morgan Stanley upgraded its rating to 'Overweight' from 'Equal Weight'. The investment bank cited the company's valuation as too punitive, with shares trading at about 16.8 times estimated 2028 price-to-free-cash-flow.

This makes Honeywell Aerospace the cheapest large-cap aerospace stock in Morgan Stanley's coverage, according to a CNBC report. Despite lingering operational risks, including slower growth and limited margin expansion, the bank believes the valuation compensates for these concerns.

Morgan Stanley set a price target of $205 for HONA, implying nearly 28% upside from Tuesday's close. The stock has fallen around 24% over the past month and is now trading at roughly 11.4 times its expected enterprise-value-to-EBITDA for 2028.