Honeywell International Inc. (HON) Stock Valuation — DCF Analysis
Conglomerates · NASDAQ
Current Price
$220.31
Intrinsic Value
$213.53
-3.2% margin of safety
COMPETITIVE MOAT
↑Diversified Business Segments
Honeywell operates across multiple resilient industries like aerospace, building technologies, and performance materials. This diversification mitigates risks associated with any single sector's downturn.
↑Strong Brand & Customer Relationships
Decades of reliable product delivery and service have fostered deep trust with industrial and commercial clients. This loyalty creates a sticky customer base, especially in critical infrastructure.
↑Technological Innovation & IP
Significant investment in R&D, exemplified by Quantinuum's valuation, generates proprietary technologies. This intellectual property creates barriers to entry and drives future growth opportunities.
INVESTMENT RISKS
↓Spin-off Uncertainty
The upcoming spin-off of its Aerospace division introduces execution risk and potential disruption to established operations. The market may react negatively to the new structure.
↓Economic Sensitivity
While diversified, many of Honeywell's end markets are cyclical and sensitive to global economic conditions. A broad recession could impact demand across its segments.
↓Regulatory & Geopolitical Shifts
Operating globally exposes Honeywell to varying regulatory environments and geopolitical instability. Changes in trade policies or international relations can impact supply chains and market access.
Base case
HON base case valuation
A base case discounted cash flow model for HON estimates an intrinsic value of about $213.53 per share, against a current price of $220.31. The model assumes 8.2% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$213.53
Margin of safety
-3.2%
Expected annual return
-0.6%
Base case assumptions: 8.2% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the HON valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Honeywell International Inc. respond.
Open DCF Calculator for HONCompany Overview
Honeywell International Inc. functions as a global leader in diversified technology and manufacturing. Its Aerospace division furnishes a comprehensive array of products and services for the aviation and space industries. This includes crucial components like auxiliary power units, propulsion systems, integrated avionics, environmental control mechanisms, and electrical power solutions. The segment also supplies engine controls, flight safety systems, communication and navigation hardware, and advanced data and software applications. Additionally, it provides radar, surveillance systems, aircraft lighting, sophisticated instruments, satellite and space components, and aircraft wheels and brakes. Essential support services cover spare parts, repairs, overhauls, maintenance, thermal systems, and wireless connectivity management. The Honeywell Building Technologies unit focuses on creating smarter, safer, and more efficient structures. It develops software for optimizing and controlling building functions, alongside sensors, switches, control systems, and instrumentation for energy management. Offerings extend to access control systems, video surveillance, fire detection products, and the installation, upkeep, and upgrading of these systems. Within its Performance Materials and Technologies division, the company delivers solutions for automation control, instrumentation, and associated software and services. It also provides catalysts, adsorbents, specialized equipment, and consulting expertise. This segment supplies materials essential for manufacturing diverse end products, such as bullet-resistant armor, nylon, computer chips, and pharmaceutical packaging. Furthermore, it produces environmentally friendly materials with reduced and low global-warming potential, utilizing hydrofluoro-olefin technology. The Safety and Productivity Solutions group equips workers and industries with a wide range of products. These comprise personal protective equipment, apparel, gear, and footwear, alongside advanced gas detection technology. It offers cloud-based notification and emergency messaging systems, mobile devices and software, and solutions for supply chain and warehouse automation, including both equipment and software. Custom-engineered sensors, switches, and controls, as well as data and asset management productivity software solutions, also fall under this division. Established in 1906, Honeywell is headquartered in Charlotte, North Carolina.
Financial Metrics — HON Stock Valuation Data
Revenue/Share (TTM)
$57.92
FCF/Share (TTM)
$6.58
ROIC (TTM)
8.2%
ROE (TTM)
23.6%
P/FCF
33.4x
EV/EBITDA
23.4x
FCF Yield
2.99%
Debt/Equity
1.58x
Based on trailing twelve-month data, HON shows a free cash flow per share of $6.58 and a ROIC of 8.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 33.4x and FCF yield of 2.99% are important context metrics when evaluating HON's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of HON?
Honeywell International Inc. currently generates $6.58 in free cash flow per share. At the current price of $220.31, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is HON undervalued?
HON trades at a P/FCF ratio of 33.4x with a free cash flow yield of 2.99%. This P/FCF is in a moderate range. However, whether HON is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value HON stock using DCF?
To perform a DCF valuation on Honeywell International Inc.: (1) Start with the trailing free cash flow per share ($6.58) as the base, (2) project future FCF growth over 5-10 years based on Conglomerates industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting HON's risk profile — with a debt-to-equity of 1.58x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to HON?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Honeywell International Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Conglomerates trends, then discounting those amounts to today's dollars. HON's ROIC of 8.2% shows moderate capital returns.
How does WACC affect HON stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For HON, with a debt-to-equity ratio of 1.58x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 23.4x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See HON PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value HON with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.