Is HON a good stock to buy? We came across a bullish thesis on Honeywell International Inc. on r/ValueInvesting by Buffprime. In this article, we will summarize the bulls’ thesis on HON. Honeywell International Inc.’s share was trading at $231.55 as of May 27th. HON’s trailing and forward P/E were 36.99 and 21.88 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 and internationally. HON is spinning off its Aerospace Technologies division (HONA) in Q3 2026 following activist pressure from Elliott Management, which has built a $5B position, creating a standalone $17.4B revenue aerospace pure-play with 24.6% EBIT margins.
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The business spans avionics, APUs, and flight control systems, with an advantaged aftermarket profile where 55–65% of revenues are recurring or semi-recurring and margins run 8–15 points higher than OEM due to airline maintenance cycles, forming a durable moat.
The market opportunity is framed less as Greenblatt-style mispricing and more as structural multiple rerating, as division has been valued at 15–17x EBITDA inside Honeywell versus 19–23x for comparable pure-plays such as Collins Aerospace and Safran, implying conglomerate discount removal rather than information asymmetry. Forced selling from ESG-excluded defense exposure funds and mandate-driven automation holders is expected given immediate S&P 500 inclusion and 30+ sell-side coverage, suggesting a shorter 6–8 week dislocation rather than a deep collapse, with likely entry range between a $55–75B market capitalization.
Capital structure remains levered but manageable post $16B senior notes issuance, leaving ~3.1x net debt/EBITDA and generating roughly $2.6B in post-debt free cash flow, translating to ~3.5% FCF yield at the midpoint valuation, which appears attractive relative to quality and growth. Honeywell RemainCo transitions into a $19–22B automation franchise with Building Automation margins and software leverage via Forge, with June 3, 2026 Investor Day in Phoenix where standalone guidance, capital allocation, and distribution mechanics crystallize, positioning HONA for a rerating toward peer aerospace multiples and asymmetric upside potential.
Previously, we covered a bullish thesis on GE Aerospace (GE) by Asymmetric Ventures’ Substack in May 2025, which highlighted the strong MRO-driven aftermarket moat, long-term engine service contracts, and durable barriers to entry in commercial aerospace. GE’s stock price has appreciated by approximately 31.19% since our coverage. Buffprime shares a similar view but emphasizes spin-off driven rerating and sum-of-parts value unlock in Honeywell’s aerospace separation.
Honeywell International Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held HON at the end of the first quarter which was 79 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.
