Honeywell (HON): A Fresh Look at Valuation Following Bank of America Downgrade and Solstice Advanced Materials Spinoff

Honeywell International (HON) shares are catching attention after Bank of America downgraded the stock to sell. The move was attributed to expectations of slower earnings growth in 2026 and the spinoff of Solstice Advanced Materials.

See our latest analysis for Honeywell International.

Honeywell’s share price has taken a noticeable hit recently, with a 30-day decline of 8% that extends to a sharp 15.7% fall year-to-date. Even factoring in dividends, total shareholder return sits at -10% over the past 12 months. While the recent Bank of America downgrade and bearish options activity have pressured sentiment, this year’s slide follows a mix of technical support and signs of resilience. Momentum is clearly fading as investors reassess the outlook and valuation.

If Honeywell’s recent moves have you reassessing your portfolio, this could be a good time to broaden your search and discover See the full list for free.

After months of red ink for Honeywell, investors are now faced with a pivotal question: is today’s lower price a compelling entry point, or is the market already reflecting all the growth challenges and opportunities ahead?

Most Popular Narrative: 22.6% Undervalued

With a fair value estimate of $245.60 compared to the last close of $190.02, the most widely followed narrative sees Honeywell as meaningfully undervalued by the market. This sets the stage for a debate around the company’s catalysts and assumptions.

Honeywell's decision to separate into three independent companies (Automation, Aerospace, and Advanced Materials) could unlock significant value and better position each entity for long-term growth, impacting revenue and margins positively.

Read the complete narrative.

What could possibly justify such a steep disconnect from the current share price? The calculations rest on a transformative business breakup, the promise of stronger margins, and a growth runway analysts usually reserve for market leaders. Curious to see which expectations power that bold target? Delve deeper for the full story behind the numbers.

Result: Fair Value of $245.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent economic headwinds and uncertainties around the upcoming breakup could threaten Honeywell’s expected margin gains and longer term growth story.

Find out about the key risks to this Honeywell International narrative.

Another View: How Does the SWS DCF Model Value Honeywell?

While analyst and market multiples point to Honeywell as undervalued, our SWS DCF model offers a second opinion. It estimates Honeywell’s fair value at $216.58, which is about 14% above the current share price. This suggests the margin of undervaluation could be less dramatic than multiples-based approaches claim. Which perspective makes more sense for you?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Honeywell International Narrative

If you see the story differently, or want to dig into the numbers on your own terms, it only takes a few minutes to develop your own perspective. Do it your way

A great starting point for your Honeywell International research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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