The U.S. industrial conglomerate Honeywell is aggressively pursuing a major slice of the defense sector’s most lucrative contracts. However, Wall Street sentiment remains cautious for now. As the company’s aerospace division vies for a role in a monumental $175 billion U.S. missile defense initiative, European analysts have responded with a tepid “Neutral” rating. This raises a pivotal question for shareholders: is Honeywell on the cusp of a significant turnaround, or will the current period of disappointment persist?
Analyst Consensus Shows a Divergence of Views
Market experts are currently divided in their assessment. This tension is exemplified by the recent analysis from French banking giant BNP Paribas. On Wednesday, the bank initiated coverage with a “Neutral” stance, attaching a price target of $195—a figure barely above the stock’s present trading level. This conservative outlook contrasts sharply with the broader market consensus. A survey of 27 analysts reveals an average rating of “Moderate Buy,” with a mean price target approximating $240. Achieving this level would imply an upside potential exceeding 20 percent.
The skepticism held by some observers is rooted in Honeywell’s ongoing corporate transformation. The conglomerate is in the midst of a complex breakup. Plans call for the spin-off of its high-performance materials business (Solstice) by the end of 2025, followed by the separation of its aerospace segment around mid-2026. In this context, the aggressive push for the missile defense contract is widely perceived as a strategic move to maximize the valuation of the aerospace unit ahead of its eventual independence as a public entity. To date, this strategy has failed to galvanize investor confidence, with the stock trading notably lower since the start of the year.
Should investors sell immediately? Or is it worth buying Honeywell?
Pursuit of a Defense Contract Windfall
At the heart of Honeywell’s strategy is a focused offensive in the defense arena. Matthew Milas, President of the Defense & Space business, has explicitly highlighted the company’s targeting of the U.S. Department of Defense’s multi-decade infrastructure program, known internally as “Golden Dome.” Honeywell views this initiative as a massive future revenue stream and aims to position its command and control technologies to secure a lasting share of the estimated $175 billion budget. For the soon-to-be-independent aerospace technologies division, success here would represent a strategic triumph of the highest order.
A Potential Inflection Point Approaches
Could this defense initiative become the much-needed catalyst for the stock? Technical analysts see a possible opportunity. A recent “long” trading signal identified a buy zone between $186 and $192, with a subsequent target corridor extending as high as $241. This places the shares at a critical juncture, testing whether they can break out of their current consolidation pattern.
Ultimately, restoring market faith hinges on the successful execution of the separation plans. The imminent spin-off of Solstice later this year represents the next crucial milestone. If Honeywell can deliver on this corporate action while simultaneously demonstrating tangible progress in its missile defense ambitions, the significant valuation discount relative to the broader market may finally begin to narrow. Shareholders are awaiting a clear signal that this dual-track strategy is gaining traction.
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