Honeywell International Inc. HON
Honeywell Technologies, now a standalone automation pure-play post-Aerospace spin-off, trades at a 70% P/E discount to industrial peers (8.4x vs. 28.5x median) despite Q2 2026 results showing EPS of $1.95 (+10% YoY), orders growing 16% YoY, and a $20B backlog (+9% YoY) that signal revenue acceleration ahead. FY2025 margin compression — operating margin fell to 17.5% from 19.2% and EPS declined 15.5% to $14.72 — appears to be bottoming as management targets 22%+ segment margins exiting FY26 through structural cost reductions and portfolio simplification.
The combination of a deeply discounted valuation, improving order momentum, and $5.39B in trailing free cash flow supports a buy rating, though elevated leverage at $34.58B total debt against $15.44B equity warrants monitoring.
What could go wrong
- Elevated leverage. Total debt of $34.58B against stockholders' equity of $15.44B as of FY2025 constrains financial flexibility and raises interest-cost sensitivity in a higher-rate environment.
- Process Automation margin contraction. Q2 2026 news flagged Process Automation margins contracting; if this segment does not stabilize, consolidated margin recovery toward the 22%+ target could stall.
- Post-spin execution risk. Portfolio simplification, stranded-cost elimination, and pending divestitures in Industrial Automation create execution uncertainty that could delay margin expansion into 2027.
- Technical breakdown. As of 2026-08-28, HON closed at $217.43, below both its 50-day MA ($230.51) and 200-day MA ($221.42), with a bearish MACD histogram of -1.69 and RSI at 37.7, suggesting near-term selling pressure.
What would change my mind
Where this comes from: peer_relative (as of 2026-08-28) · Seeking Alpha news article, published 2026-08-28 · FMP fundamentals and derived_metrics, FY2025 · FMP fundamentals, FY2025. Orin's read on HON; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All HON filings| Form | Filed | What it says | Read |
|---|---|---|---|
| 8-K | 19 Aug | Honeywell International Inc. | read |
| 13G | 7 Aug | — | on file |
| 10-Q/A | 23 Jul | Honeywell International Inc. | read |
| 10-Q | 23 Jul | Honeywell International Inc. | read |
| 8-K | 23 Jul | Honeywell International Inc. | read |
| 8-K | 29 Jun | Honeywell International Inc. | read |
| 8-K | 15 Jun | Honeywell International Inc. | read |
| 8-K | 5 Jun | Honeywell International Inc. | read |
Largest holders · 13F Q1 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $9.3B | 0.1% of fund |
| State Street | $7.2B | 0.2% of fund |
| Morgan Stanley | $4.2B | 0.3% of fund |
| Wellington Management Group Llp | $3.8B | 0.7% of fund |
| Geode Capital Management | $3.7B | 0.2% of fund |
| Vanguard Portfolio Management | $3.5B | 0.2% of fund |
154 filers · quarter ended Q1 2026 · positions, not flows
Insiders, last 24 months: 260 Form 4 filings, net $108.8M. Of the 50 on hand, 0 were open-market purchases and 2 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about HON
Orin answers questions about HON from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 8.2× | 26.0× | 44.5× |
| EV/EBITDA | 7.4× | 19.2× | — |
| P/S | 1.86× | 4.20× | — |
| P/B | 2.7× | 8.1× | — |
Its P/E sits below all 5 of the last 5 years (−11.81σ from its own mean).
1.3%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $5.4B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$262
$239 – $293 · +24% against today's price
- 20 buy or overweight
- 10 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| HONHoneywell International Inc. | $67B | 8.2× | 7.4× | 36.6% | 22.7% | 42% |
| ADPAutomatic Data Processing, Inc. | $105B | 24.0× | 16.8× | 48.2% | 20.1% | 70% |
| DEDeere & Company | $192B | 39.3× | 22.2× | 35.7% | 10.2% | 18% |
| ETNEaton Corporation plc | $170B | 44.5× | 29.6× | 35.9% | 12.8% | 20% |
| GDGeneral Dynamics Corporation | $93B | 20.6× | 15.2× | 15.4% | 8.2% | 17% |
| LMTLockheed Martin Corporation | $121B | 19.3× | 14.0× | 11.8% | 8.2% | 86% |
| MMM3M Company | $88B | 30.1× | 17.9× | 39.4% | 11.9% | 77% |
| NOCNorthrop Grumman Corporation | $73B | 16.3× | 11.7× | 20.1% | 10.5% | 27% |
| PHParker-Hannifin Corporation | $122B | 33.6× | 22.5× | 37.7% | 17.0% | 25% |
| TTTrane Technologies plc | $96B | 33.0× | 22.9× | 35.4% | 13.3% | 34% |
| UNPUnion Pacific Corporation | $164B | 22.3× | 14.5× | 45.5% | 28.8% | 39% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 69.5% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $228 | $208.29 · +9% | 2026-06-10 |
| Levered DCF | $175 | $208.29 · −16% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.