Morgan Stanley Upgrades Honeywell Aerospace to 'Overweight' on Attractive Valuation

Morgan Stanley analyst Kristine Liwag has upgraded Honeywell Aerospace (HONA) to 'Overweight' and maintained her $205 price target, indicating potential upside of nearly 35% from its previous close.

Liwag believes that HONA stock is now the most attractive large-cap aerospace name in her coverage universe, trading at about 11.4x its estimated 2028 EBITDA - a massive 38% discount to the average sector multiple.

The analyst acknowledged key challenges facing HONA, including limited margin expansion and lower next-gen commercial content, but said that 'the valuation now more than compensates for these risks.'

Liwag also noted that Honeywell Aerospace shares remain unattractive for income-focused investors as they do not currently pay a dividend.