Buy or Sell Honeywell International Stock?
Honeywell International (HON) stock has jumped 6.8% during the past day, and is currently trading at $220.67. We believe there is a near-equal mix of good and bad in HON stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Moderate |
| What you get: | |
| Growth | Moderate |
| Profitability | Moderate |
| Financial Stability | Strong |
| Downturn Resilience | Weak |
| Operating Performance | Moderate |
| Stock Opinion | Fairly Priced |
HON stock has jumped meaningfully recently and we currently find it fairly priced. This may feel like a caution, and there is significant risk in relying on a single stock. However, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Let’s get into details of each of the assessed factors but before that, for quick background: With $140 Bil in market cap, Honeywell International provides diversified technology and manufacturing solutions, including building control software and personal protective equipment such as apparel, gear, and footwear.
- Honeywell International Stock Shares $43 Bil Success With Investors
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- Honeywell International Stock at Support Zone – Bargain or Trap?
- HON Capital Return Hits $44 Bil in 10 Years
- HON Down 6.2% In A Day. It Dropped More in Past Market Dips.
- S&P 500 Stocks Trading Near 52W High
[1] Valuation Looks Moderate
| HON | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 3.4 | 3.2 |
| Price-to-Earnings Ratio | 22.8 | 24.2 |
| Price-to-Free Cash Flow Ratio | 22.7 | 21.1 |
This table highlights how HON is valued vs broader market. For more details see: HON Valuation Ratios
[2] Growth Is Moderate
- Honeywell International has seen its top line grow at an average rate of 5.2% over the last 3 years
- Its revenues have grown 7.5% from $38 Bil to $41 Bil in the last 12 months
- Also, its quarterly revenues grew 7.0% to $10 Bil in the most recent quarter from $9.7 Bil a year ago.
| HON | S&P 500 | |
|---|---|---|
| 3-Year Average | 5.2% | 5.4% |
| Latest Twelve Months* | 7.5% | 5.1% |
| Most Recent Quarter (YoY)* | 7.0% | 6.2% |
This table highlights how HON is growing vs broader market. For more details see: HON Revenue Comparison
[3] Profitability Appears Moderate
- HON last 12 month operating income was $7.7 Bil representing operating margin of 18.9%
- With cash flow margin of 18.4%, it generated nearly $7.5 Bil in operating cash flow over this period
- For the same period, HON generated nearly $6.1 Bil in net income, suggesting net margin of about 15.1%
| HON | S&P 500 | |
|---|---|---|
| Current Operating Margin | 18.9% | 18.6% |
| Current OCF Margin | 18.4% | 20.4% |
| Current Net Income Margin | 15.1% | 12.7% |
This table highlights how HON profitability vs broader market. For more details see: HON Operating Income Comparison
[4] Financial Stability Looks Strong
- HON Debt was $37 Bil at the end of the most recent quarter, while its current Market Cap is $140 Bil. This implies Debt-to-Equity Ratio of 26.5%
- HON Cash (including cash equivalents) makes up $13 Bil of $81 Bil in total Assets. This yields a Cash-to-Assets Ratio of 16.5%
| HON | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 26.5% | 21.1% |
| Current Cash-to-Assets Ratio | 16.5% | 7.0% |
[5] Downturn Resilience Is Weak
HON has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- HON stock fell 28.6% from a high of $233.74 on 16 August 2021 to $166.97 on 30 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 November 2024
- Since then, the stock increased to a high of $240.40 on 6 July 2025 , and currently trades at $220.67
| HON | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -28.6% | -25.4% |
| Time to Full Recovery | 774 days | 464 days |
2020 Covid Pandemic
- HON stock fell 43.3% from a high of $183.23 on 17 January 2020 to $103.86 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 5 November 2020
| HON | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -43.3% | -33.9% |
| Time to Full Recovery | 227 days | 148 days |
2008 Global Financial Crisis
- HON stock fell 62.7% from a high of $62.25 on 19 May 2008 to $23.23 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 19 October 2012
| HON | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -62.7% | -56.8% |
| Time to Full Recovery | 1320 days | 1480 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read HON Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.