Honeywell International Inc. (HON): A Bull Case Theory

We came across a bullish thesis on Honeywell International Inc.  on Value investing subreddit by PrimaryShock384. In this article, we will summarize the bulls’ thesis on HON. Honeywell International Inc. 's share was trading at $221.25 as of August 27^th. HON’s trailing and forward P/E were 25.17 and 21.55 respectively according to Yahoo Finance.

General Electric’s breakup into GE Aerospace, GE Vernova, and GE HealthCare demonstrated how spinoffs can unlock massive value, with the combined standalone entities now valued at ~$474B compared to GE’s pre-split ~$290B, a 64% uplift. By separating divisions, investors were finally able to properly value high-growth businesses without the drag of conglomerate complexity. A similar opportunity may now lie ahead for Honeywell, which is considering splitting into three focused companies: Honeywell Aerospace, Honeywell Automation, and Solstice Advanced Materials.

Aerospace, Honeywell’s largest segment with $15.5B in 2024 revenue and strong aftermarket services, is expected to be the crown jewel, serving commercial, defense, and urban air mobility markets. Honeywell Automation, comprising Safety and Productivity Solutions and Building Technologies, would target warehouse automation, mobility devices, fire safety, and building management software, with sticky demand from industries like e-commerce, healthcare, and infrastructure. Solstice Advanced Materials, built around Energy and Sustainability Solutions, would be a pure-play on decarbonization and advanced materials, supporting carbon capture, EV batteries, and clean hydrogen.

Using conservative multiples on 2024 estimated EBITDA, a sum-of-the-parts valuation suggests ~$168 per share, with potential upside to $230–$260 if standalone entities achieve premium multiples, similar to peers. While execution risk exists—spinoffs require careful allocation of resources, boards, and capital—the breakup could unlock significant shareholder value, providing investors flexibility to focus on their preferred businesses. Near term, investors could accumulate Honeywell shares in anticipation of the spinoff, or wait for the separation to selectively invest in the most attractive segment.

Previously we covered a bullish thesis on GE Aerospace (GE) by Asymmetric Ventures in May 2025, which highlighted its aftermarket services strength, exclusive Boeing and Airbus partnerships, and durable competitive moats. The stock has appreciated by 13.05% since our coverage as the thesis played out. PrimaryShock384 shares a similar view on Honeywell but emphasizes value creation through a potential three-way spinoff, with Aerospace positioned as the crown jewel.

Honeywell International Inc.  is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held HON at the end of the first quarter which was 67 in the previous quarter. While we acknowledge the potential of HON as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.