How the Honeywell Restructuring Could Impact Its Share Price in 2025

If you’re standing at the decision crossroads for Honeywell International, you’re not alone. Plenty of investors are sizing up whether holding, buying in, or cashing out makes sense right now. The stock hasn’t made many headlines lately, but its quiet performance often hides interesting potential under the surface.

Take a quick glance at Honeywell’s returns and you’ll notice this year has felt like treading water. The stock is down 6.9% year-to-date, and the last month’s slip of 2.3% has hardly helped confidence. But step back, and the story shifts. Honeywell is up nearly 30% over three years, and it has delivered 33.8% across the last five. That kind of durability sets it apart, even with a modest 0.2% lift in the last twelve months.

Recent market shifts haven’t rattled Honeywell’s fundamentals much. Broader industrial sector moves and renewed emphasis on technological innovation, especially around automation and energy solutions, have helped steady its long-term narrative. Investors are clearly still weighing the potential for renewed growth versus concern over economic cycles and global demand.

So, is Honeywell valued at the right price, or does it still have miles to run? According to our valuation scorecard, the company is undervalued in 2 out of 6 key checks, coming in with a value score of 2. This puts it in a middling position, but there’s more to the story than a number.

Let’s break down the major ways analysts measure valuation. After that, I’ll walk you through what may be a more insightful way to judge whether Honeywell belongs in your portfolio.

Honeywell International scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Honeywell International Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting how much cash it is expected to generate in the future, then discounting those flows back to today’s dollars. For Honeywell International, this process begins with current Free Cash Flow (FCF), which is $5.07 billion over the last twelve months, and factors in how analysts see those figures growing over time.

Analyst projections suggest Honeywell's annual Free Cash Flow is expected to steadily climb over the next decade. For instance, the FCF estimate for 2029 reaches $7.33 billion, with future years continuing to scale upward based on extrapolations. Actual analyst estimates cover the next five years, while projections beyond that reflect cautious long-term growth trends applied by Simply Wall St.

After processing these cash flows through the DCF model, the estimated intrinsic value per share comes out to $203.78. With the current share price sitting about 3.0% above this valuation, the DCF suggests the stock is ever so slightly overvalued at this time. However, the difference is small enough that most long-term investors might consider this fairly priced rather than alarmingly above value.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Honeywell International.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Honeywell International's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Honeywell International Price vs Earnings (PE)

The price-to-earnings (PE) ratio is widely used for valuing established, profitable firms like Honeywell International because it ties share price directly to current earnings. This makes it a relevant gauge for companies with steady profits. The PE ratio also reflects what investors are willing to pay for each dollar of earnings, so it tends to capture sentiment around the company’s growth prospects and risk profile.

Higher growth expectations or lower perceived risks can justify a higher PE multiple. In contrast, industries facing uncertainty or slower expansion typically trade at lower ratios. For context, Honeywell’s current PE is 23.3x. This is noticeably higher than the Industrials sector average of 13.1x, but a bit lower than its listed peers, which average 27.7x. At first glance, this might make Honeywell look expensive compared to the broader sector but more reasonable versus direct competitors.

To gain a clearer perspective, Simply Wall St uses a “Fair Ratio,” a custom benchmark that factors in the company’s specific growth trends, profit margins, size, and industry risk. Unlike simple peer or sector averages, this Fair Ratio gives a more holistic view of what a reasonable PE should be right now. Honeywell’s Fair Ratio is calculated to be 28.7x. Since its actual PE ratio of 23.3x is comfortably below this fair level, the stock currently appears to be undervalued on earnings.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Honeywell International Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. Simply put, a Narrative is your own investment story for a company, laying out how you think its business will evolve and what you believe is a reasonable fair value based on your assumptions for future revenue, earnings, and profit margins. Narratives connect a company’s story to a data-driven forecast and, ultimately, to a fair value estimate. This allows you to see exactly how your view plays out in numbers.

Narratives are easy to create and update, and they are available to everyone on Simply Wall St’s Community page, used by millions of investors worldwide. This tool allows you to compare your assumptions to those of the market or other investors, helping you decide whether Honeywell is a buy, hold, or sell by weighing your fair value against the current market price. Narratives also stay live and automatically refresh when relevant news or earnings releases emerge so your analysis is always up to date.

For example, right now, some investors see Honeywell's fair value as high as $290, expecting strong growth post-separation. Others are more cautious, estimating value around $203 due to tariff and execution risks.

For Honeywell International, we’ll make it really easy for you with previews of two leading Honeywell International Narratives:

🐂 Honeywell International Bull Case

Fair Value: $252.97

Current price is about 17.1% below this fair value.

Expected annual revenue growth: 4.63%

• Analysts believe Honeywell’s separation into three entities and recent strategic acquisitions will unlock value and position the company for long-term growth, boosting both revenue and profit margins.
• Continued investment in high-growth verticals like LNG and data centers, plus ongoing share repurchases, is expected to enhance operational stability and drive earnings per share higher.
• Risks revolve around execution challenges from the separation process, global economic uncertainty, and tariff pressures. On balance, these are considered manageable within the bullish narrative.

🐻 Honeywell International Bear Case

Fair Value: $203.00

Current price is about 3.4% above this fair value.

Expected annual revenue growth: 3.67%

• Tariff exposure, global trade uncertainties, and increased costs tied to Honeywell’s separation into three companies could compress margins and restrain revenue growth despite ongoing mitigation strategies.
• Substantial separation costs and potential revenue headwinds in Industrial Automation and Aerospace segments present significant near-term earnings risks.
• While management’s confidence in buybacks and strategic moves is positive, bearish analysts believe current market expectations are too high given near-term risks and execution pressures.

Do you think there's more to the story for Honeywell International? Create your own Narrative to let the Community know!

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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