TLDR
- Morgan Stanley upgraded Honeywell Aerospace (HONA) from Hold to Buy, keeping its price target at $205
- HONA stock rose over 6% on Wednesday following the upgrade
- The stock had fallen roughly 27% since its June 29 spin-off from Honeywell Technologies
- Morgan Stanley cited valuation, with HONA trading at a 35-38% discount to aerospace peers
- Supply chain issues and a Q2 guidance cut remain near-term risks
Honeywell Aerospace (HONA) stock jumped more than 6% on Wednesday after Morgan Stanley analyst Kristine Liwag upgraded the stock from Hold to Buy, with a price target of $205.
The stock was trading at $168.40 in early trading, up from an opening near $161. That’s still well below the roughly $220 price at which HONA debuted when it spun off from Honeywell Technologies (HON) on June 29, 2026.
The upgrade did not come with a price target change, which tells its own story. Liwag kept her $205 target unchanged, meaning the call is built on the stock falling to meet the thesis rather than the thesis improving.
Since the spin-off, HONA has dropped approximately 27% while the S&P 500 gained around 5% over the same period. A weak Q2 earnings report on August 5, which included a surprise cut to full-year guidance, accelerated the selloff.
Valuation Drives the Call
Morgan Stanley’s case rests almost entirely on price. HONA trades at around 19 times forward earnings, making it the cheapest large-cap aerospace stock Liwag covers. By comparison, GE Aerospace (GE) trades at 43 times forward earnings.
The firm also noted HONA trades at roughly 16.8 times 2028 price-to-free cash flow and 11.4 times 2028 EV/EBITDA. Those represent discounts of about 35% and 38% to peer medians, respectively.
Morgan Stanley’s view is that those discounts more than account for the near-term problems. The stock’s 52-week range of $150.03 to $297.50 shows just how far sentiment has shifted since HONA’s all-time high in mid-June.
Short interest in HONA has also declined in recent weeks, reducing some of the bearish pressure that had been hanging over the stock.
Analyst Coverage Still Building
Right now, 16 analysts cover HONA. Of those, seven, or 44%, have a Buy rating. The typical Buy-rating ratio for S&P 500 stocks runs between 55% and 60%, suggesting the analyst community has not fully warmed to the stock yet.
The average price target across analysts sits at around $215.
More coverage is likely coming. GE Aerospace has 24 analysts, and RTX has 26. Some of those aerospace analysts are expected to add HONA to their coverage now that it is a standalone aerospace and defense company.
Supply chain problems have weighed on HONA’s revenue growth and are expected to continue doing so in the near term. The Q2 report flagged these issues alongside the guidance reduction.
The broader market offered little help on Wednesday, with the S&P 500 up just 0.2% and the Nasdaq modestly negative, making HONA’s move clearly company-specific.
The average analyst price target for Honeywell Aerospace currently stands at approximately $215, with Morgan Stanley’s $205 target sitting slightly below that consensus.
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