Is Honeywell Aerospace (HONA) Cheap After Its Jefferies Conference Outlook Update?

Honeywell Aerospace (HONA) is set to outline its outlook and priorities when Chief Executive Officer Jim Currier speaks at the Jefferies Global Industrials Conference in New York on September 9, an event that investors often watch closely.

Honeywell Aerospace enters this conference with the share price at US$155.49, after a 1 day share price return that declined 3.43% and a 30 day share price return that fell 7.73%, while the year to date share price return is down 22.25%. This points to fading momentum and heightens investor focus on how management frames future priorities.

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Honeywell Aerospace still runs a sizable, diversified aviation business, yet the share price has slipped hard this year. Are you looking at temporary weakness or a stock that is still not cheap enough?

Preferred P/E of 25.3x: Is It Justified For Honeywell Aerospace?

On valuation, Honeywell Aerospace screens as cheaper than many peers, even after a tough year in the share price. The stock closed at $155.49, while analysts see upside and the SWS model flags it as trading at a discount to fair value. That puts the current earnings multiple under the microscope.

The preferred yardstick here is the P/E ratio, which sits at 25.3x for Honeywell Aerospace. P/E compares the share price to earnings per share, so it effectively tells you how many dollars investors are willing to pay today for each dollar of current profit. For an aviation supplier with a long operating history and a large installed base, that kind of metric matters because it reflects how the market views the durability of those earnings.

According to the SWS checks, HONA is described as good value based on its P/E of 25.3x compared with a peer average multiple of 31.8x. The same P/E is also framed as attractive relative to the broader US Aerospace & Defense group, where the average sits at 37x. That gap suggests investors are not paying the same premium for Honeywell Aerospace earnings as they are for many sector rivals, even though revenue of $17.9b and net income of $1.95b still point to a sizeable, profitable operation.

Those comparisons set up a clear spread: the market is paying a materially higher P/E for the industry basket than for Honeywell Aerospace, and even similar companies carry richer earnings tags. If sentiment or growth expectations adjust closer to sector averages, the valuation multiple is one area that could move first, because investors often use it as a shorthand for how much future profit potential is already baked into the price.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-earnings of 25.3x (UNDERVALUED)

Still, Honeywell Aerospace faces risks if aviation demand softens or defense budgets are delayed, which could pressure its US$17.9b revenue base and earnings profile.

Find out about the key risks to this Honeywell Aerospace narrative.

Another View: What The Honeywell Aerospace DCF Says

The P/E points one way, but the SWS DCF model points even more strongly at undervaluation. On that framework, Honeywell Aerospace at $155.49 is compared with an estimated future cash flow value of $254.98. That is a steep gap. It raises a simple question: Is the cash flow story being overlooked, or is the model too generous?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Honeywell Aerospace for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals around Honeywell Aerospace often create a strong testing ground for your own thesis, so move fast, weigh both sides, and pressure test the 4 key rewards and 4 important warning signs.

Looking for more investment ideas beyond Honeywell Aerospace?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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