Honeywell Aerospace (HONA) has been in a sharp downtrend since its spinoff in late June, but this recent weakness has created an attractive entry point for long-term investors, Morgan Stanley analyst Kristine Liwag told clients in a research note today.
Liwag upgraded the Phoenix-headquartered aerospace company this morning to “Overweight” and maintained her $205 price target, indicating potential upside of nearly 35% from its previous close.
Honeywell Aerospace Stock Is Attractively Priced
According to Liwag, HONA stock is now the most attractive large-cap aerospace name in her coverage universe, trading at about 11.4x its estimated 2028 EBITDA. This marks a massive 38% discount to the average sector multiple.
In her report, the Morgan Stanley analyst acknowledged key challenges, including limited margin expansion, muted free cash flow conversion, and lower next-gen commercial content, but said: “the valuation now more than compensates for these risks.”
Note that Honeywell Aerospace currently looks headed to test its 20-day moving average (MA), with a clear break above the $186 level expected to accelerate bullish momentum in the near term.
HONA Shares Have Been Overly Punished
While the market is bracing for a drawn-out operational slump and a huge haircut to HONA’s earnings power, Liwag contends the pessimism has gone overboard.
She admitted that execution bumps and supply chain constraints pose legitimate risks to a quick rebound in the short term. However, discounting the firm’s long-term earnings potential ignores its core fundamental strength, including its massive installed base, aftermarket exposure, defense portfolio, and underlying end market demand.
That said, Honeywell Aerospace shares remain unattractive for income-focused investors as they do not currently pay a dividend.
Wall Street Remains Bullish on Honeywell Aerospace
Despite recent underperformance, others on Wall Street also agree with Liwag’s constructive view on Honeywell Aerospace for the remainder of 2026.
According to Barchart, the consensus rating on HONA shares sits at “Moderate Buy” currently, with the mean price target of about $224 indicating potential upside of nearly 30% over the next 12 months.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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