Is HON a good stock to buy? We came across a bullish thesis on Honeywell International Inc. on The Variant View’s Substack. In this article, we will summarize the bulls’ thesis on HON. Honeywell International Inc.’s share was trading at $232.19 as of April 15th. HON’s trailing and forward P/E were 33.61 and 22.03 respectively according to Yahoo Finance.
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Honeywell International Inc. engages in the aerospace technologies, industrial automation, building automation, and energy and sustainable solutions businesses in the United States, Europe, and internationally. HON is undergoing a three-way breakup that is expected to unlock significant value as its Automation and Aerospace businesses separate, forcing the market to abandon the current conglomerate discount and re-rate each segment against more relevant peer groups.
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The stock currently trades at ~17x EV/EBITDA, but a sum-of-the-parts (SOTP) analysis suggests a valuation of approximately $307 per share, implying ~39% upside from $221.50 without requiring either segment to exceed peer median multiples.
The Aerospace segment stands out as the primary value driver, with EBITDA margins of ~27.3%, well above the ~21% peer median, supported by strong gross and operating margins due to its high-value avionics and systems exposure. Applying the peer median multiple of 29.5x to its earnings yields a substantial standalone valuation. Meanwhile, the Automation business reflects stable, median-level profitability, with EBITDA margins around 22.1% and free cash flow conversion near 57%, justifying a peer median multiple and reinforcing that its current valuation is suppressed by the conglomerate structure.
While risks include separation costs of up to $2 billion, litigation headwinds, and standalone cost burdens, the downside appears limited unless both segments simultaneously trade at the lowest end of peer ranges. Key catalysts include the Aerospace Investor Day, regulatory approval of the Form 10, and the targeted Q3 2026 separation, with early trading dynamics expected to drive re-rating. Overall, the breakup presents a compelling opportunity with asymmetric upside potential.
Previously, we covered a bullish thesis on GE Aerospace (GE) by Asymmetric Ventures in May 2025, which highlighted the company’s dominant MRO-driven recurring revenue model, strong aftermarket positioning, and high barriers to entry supported by deep OEM partnerships. GE’s stock price has appreciated by approximately 26.69% since our coverage. The Variant View shares a similar view but emphasizes on Honeywell’s breakup-driven valuation re-rating and sum-of-the-parts upside.
Honeywell International Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held HON at the end of the fourth quarter which was 76 in the previous quarter. While we acknowledge the risk and potential of HON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HON and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
