Cautious Hold on Honeywell: Balancing Growth Potential and Operational Challenges

Jefferies analyst Sheila Kahyaoglu maintained a Hold rating on Honeywell International (HON – Research Report) today and set a price target of $240.00.

Sheila Kahyaoglu’s rating is based on several considerations regarding Honeywell International’s current and future performance. One of the key factors is the company’s revenue growth, which has been lagging behind its peers by an average of 5 percentage points per year since 2014. This underperformance suggests that Honeywell may need to sacrifice some of its high margins to accelerate research and development efforts and address delivery issues that extend into 2027. The company’s Aerospace Technologies segment, which is set to spin off in the second half of 2026, plays a significant role in this assessment.
Despite having higher margins than its peers, Honeywell’s Aerospace Technologies segment has seen its sales remain flat over the past decade, indicating a need for strategic changes to drive growth. The report suggests that increasing R&D spending and hiring could help position the company for future success, but these initiatives may impact margins in the short term. Additionally, while the segment is highly cash generative, potential mergers or acquisitions with other companies like WWD or HWM could be beneficial. Overall, the Hold rating reflects a cautious approach, balancing the potential for future growth against current operational challenges.