Honeywell International (HON) – Breakup Progress Unlocks Hidden Value
Honeywell (HON) trades around $219, and we believe the company is entering a compelling setup as its long‑planned breakup moves closer to completion.
Here’s why we see opportunity developing:
Honeywell already spun off its Advanced Materials division in October, which now trades separately as Solstice Advanced Materials. More importantly, management confirmed in late 2025 that the Honeywell Aerospace spinoff remains on schedule. These portfolio moves are steadily reshaping the company and simplifying what has historically been a complex conglomerate structure.
As the separation process advances, the stock has drifted to a wider discount versus its underlying Sum‑of‑the‑Parts value. That gap appears to be creating a favorable entry point. While reported enterprise estimates for 2026 have moved lower and currently suggest flat performance, those numbers matter less than usual because they’re distorted by the ongoing restructuring.
JPMorgan just upgraded the shares to Overweight and raised its price target to $255 from $218, implying roughly 18% upside from current levels. Analyst Stephen Tusa noted that Honeywell’s messy 2026 EPS profile should clear up once full guidance is issued and that most of the dilutive portfolio actions are now behind the company. He also increased the target multiple, applying only a modest 5% discount to the sector due to improved visibility on the Sum‑of‑the‑Parts story.
The stock moved about 1% higher following the upgrade, signaling that investors are starting to pay attention to the value that could be unlocked as Honeywell completes its transformation.
Wall Street remains divided overall, with 17 of 31 analysts rating the stock Buy or Strong Buy and the rest at Hold or Underperform. That split itself often appears when a company is in transition and the market hasn’t fully repriced the post‑breakup potential.
With major spinoffs already underway and clearer structure ahead, Honeywell looks increasingly attractive before the separation story is fully reflected in the share price.
