Bernstein Raises Honeywell Target Price to 243 USD, Incorporating RemainCo and Quantinuum ownership value after aerospace separation

Overview

This is an event commentary on Honeywell International Inc. After Honeywell’s aerospace spin-off, Bernstein updated its model, focusing on reflecting RemainCo financial metrics, share count changes, downstream project revisions, and the value of its held stake in Quantinuum. The report maintains a Market-Perform rating and raises the 12-month target price to 243 USD.

Core views

The central view is that after Honeywell’s aerospace spin-off, the core RemainCo business is valued at about 204 USD per share using a 20x NTM+1 P/E, and adding the Quantinuum ownership contribution of about 39 USD per share yields a 243 USD target price. The rating remains Market-Perform, indicating the analyst expects the stock’s relative performance to be broadly in line with the market, rather than significantly outperforming or underperforming.

Analysis framework

The report uses a valuation method that adds segment value and equity-holding value: it first estimates core business value using RemainCo-updated EPS and share count, then separately adds Quantinuum ownership value. Financial forecasts cover revenue, gross profit, EBIT, net income, EPS, shares outstanding, balance-sheet items, etc., with valuation tables showing P/E multiples from 2025A to 2027E.

Methodology notes

• Valuation methodsNTM+1 P/E Multiple Valuation

  Use 20x NTM+1 P/E multiplied by 10.19 USD EPS, resulting in about 204 USD per share for the core business.

  This method applies a forward year-plus-one earnings base and is suitable for relative valuation of mature industrial companies; this report emphasizes that the multiple is unchanged and that target-price movement mainly came from post-spin-off financial re-framing, share count, and Quantinuum value updates.

• Valuation methodsOwnership Value Add-Back Approach

  Add Quantinuum ownership value back to the target price separately.

  The report assumes a 94 USD target for Quantinuum and Honeywell ownership of about 49%, corresponding to about 39 USD of value per HON share, and adds this to the core business valuation.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• HON.US

  Covered security in the report

  Strengths

  Valuation of RemainCo becomes clearer after the spin-off; growth in Building Automation and recurring revenue from Forge products, together with margin expansion in IA after WWS/PPS separation, are potential upside drivers.

  Weaknesses

  Execution drag from the separation, energy price moves, and delays in LNG projects could suppress realization of expectations.

  Comparison

  Bernstein’s Market-Perform definition is that Honeywell is expected to track roughly within plus/minus 15 percentage points of the market index over the next 12 months.

  Risks

  Execution drag from reorganization, weakening demand drivers in Building Automation, weak or delayed LNG projects.

• Quantinuum

  Honeywell ownership value contribution

  Strengths

  The report converts a Quantinuum target price of 94 USD and Honeywell’s approximately 49% stake into approximately 39 USD per-share value contribution to HON.

  Weaknesses

  Valuation depends on assumptions around Quantinuum target pricing and ownership; a downgrade in those assumptions would weaken the valuation support for the HON target price.

  Comparison

  In the 243 USD total target price, Quantinuum ownership contributes about 39 USD, while the core business contributes about 204 USD.

  Risks

  Volatility in Quantinuum valuation, changes in ownership percentage, or revisions to market pricing assumptions.

Key data

• RatingMarket-PerformBernstein maintains the rating.
• Target Price243.00 USDThe prior target price was 233.00 USD.
• Current Price223.42 USDThe table date is July 9, 2026.
• NTM+1 EPS10.19 USDUsed for RemainCo valuation.
• P/E Multiple20xThe valuation multiple is unchanged from the prior model.
• Implied Price for Core Business204 USDDerived from 20x NTM+1 P/E and 10.19 USD EPS.
• Quantinuum Ownership Value39 USD/shareBased on a Quantinuum target of 94 USD and Honeywell ownership of about 49%.
• 2026E Diluted Base EPS8.26 USDFrom HON financial summary.
• 2027E Diluted Base EPS10.02 USDFrom HON financial summary.
• 2026E Revenue20,378 million USDFrom HON financial summary.
• 2027E Revenue21,064 million USDFrom HON financial summary.

Impact & implications

This update mainly changes investors’ understanding of the post-spin-off Honeywell residual business and Quantum-related asset value decomposition. The higher target price reflects Quantinuum ownership value and the model adjustments after the spin-off, but the Market-Perform rating indicates the analyst believes the current risk-reward profile has not moved into a decisively bullish regime.

Risks

• Stable or lower power prices could weaken demand momentum in building automation.
• Weak or delayed LNG projects, for which the market may not have fully priced in the risk.
• The aerospace business spin-off may create integration drag.
• Changes in Quantinuum valuation assumptions may affect the ownership-value contribution in the target price.

What to watch

• Whether post-spin-off RemainCo guidance is achieved.
• Recurring-revenue performance of Building Automation growth and Forge products.
• Margin expansion progress in IA after WWS/PPS separation.
• Changes in Quantinuum valuation, target price, and Honeywell ownership value.
• Post-spin-off share count changes and the EPS trajectory.