Honeywell's Underperformance Affects Dow Jones Index
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy HON?
Source: Fool
- Dow Component Changes: Honeywell replaced Raytheon Technologies in the Dow on August 31, 2020, but has only delivered a 56.2% total return since then, significantly lagging behind RTX's 231.1%, indicating its failure to meet market expectations.
- Unfulfilled Innovation Potential: Although Honeywell was viewed as a diversified and innovative industrial giant in 2020, its persistent underperformance in earnings and free cash flow growth, partly due to supply chain and inflationary pressures, has hindered its ability to capitalize on its strengths.
- Spinoff Plans Generate Interest: In November 2024, activist investor Elliott Investment Management amassed a position exceeding $5 billion, prompting Honeywell to consider a breakup; the successful spinoff of Solstice Advanced Materials in October 2025, which saw a 79.4% gain, highlights the potential for growth through such restructuring.
- Future Outlook and Market Reaction: Honeywell plans to spin off its aerospace division on June 29, 2024, with the remaining business focusing on industrial and building automation, and the market anticipates that this structural adjustment could enhance its standing in the Dow, reflecting a broader preference for focused companies.
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Analyst Views on HON
Wall Street analysts forecast HON stock price to rise
15 Analyst Rating
8 Buy
6 Hold
1 Sell
Moderate Buy
Current: 213.240
Low
195.00
Averages
235.07
High
262.00
Current: 213.240
Low
195.00
Averages
235.07
High
262.00
About HON
Honeywell International Inc. is an integrated operating company serving a range of industries and geographies around the world, with a portfolio that is underpinned by its Honeywell Accelerator operating system and Honeywell Forge platform. The Company provides actionable solutions for aerospace, building automation, industrial automation, process automation, and process technology. The Company supplies products, software, and services for aircrafts that it sells to original equipment manufacturers (OEM) and other customers in a variety of end markets. The Company’s portfolio of solutions and services is used in buildings worldwide for fire prevention, controls, access and security. Its offerings serve as the fundamental building blocks of industrial automation. Its sensor technologies and value-added smart edge devices offer connectivity across a variety of sensing and measurement applications. The Company offers a comprehensive portfolio of end-to-end process automation solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Core Business Growth: Wire and identification products account for 20% of Brady's revenue in the Americas and Asia, with a 19% sales increase in this segment driving overall organic sales growth of 10.4%, indicating robust market demand.
- Acquisition Plans: Brady has agreed to acquire Honeywell's Productivity Solutions and Services business for $1.4 billion, which will enhance its strength in labeling and printing while leveraging PSS's expertise in mobile computing and barcode scanners, expected to generate $25 million in annual cost synergies.
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Honeywell's Underperformance Affects Dow Jones Index
- Dow Component Changes: Honeywell replaced Raytheon Technologies in the Dow on August 31, 2020, but has only delivered a 56.2% total return since then, significantly lagging behind RTX's 231.1%, indicating its failure to meet market expectations.
- Unfulfilled Innovation Potential: Although Honeywell was viewed as a diversified and innovative industrial giant in 2020, its persistent underperformance in earnings and free cash flow growth, partly due to supply chain and inflationary pressures, has hindered its ability to capitalize on its strengths.
- Spinoff Plans Generate Interest: In November 2024, activist investor Elliott Investment Management amassed a position exceeding $5 billion, prompting Honeywell to consider a breakup; the successful spinoff of Solstice Advanced Materials in October 2025, which saw a 79.4% gain, highlights the potential for growth through such restructuring.
- Future Outlook and Market Reaction: Honeywell plans to spin off its aerospace division on June 29, 2024, with the remaining business focusing on industrial and building automation, and the market anticipates that this structural adjustment could enhance its standing in the Dow, reflecting a broader preference for focused companies.
See More
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- Guidance Upgrade: Following the release of its Q3 2026 earnings report, Brady Corporation raised its full-year adjusted diluted EPS guidance from $4.95-$5.15 to $5.20-$5.30, reflecting strong profitability and market confidence.
- Core Business Growth: Wire and identification products account for 20% of Brady's revenue in the Americas and Asia, with a 19% sales increase in this segment driving overall organic sales growth of 10.4%, indicating robust market demand.
- Acquisition Plans: Brady has agreed to acquire Honeywell's Productivity Solutions and Services business for $1.4 billion, which will enhance its strength in labeling and printing while leveraging PSS's expertise in mobile computing and barcode scanners, expected to generate $25 million in annual cost synergies.
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See More
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- Troop Deployment Cancellation: The Pentagon's cancellation of plans to deploy 4,000 U.S. troops to Poland has prompted Prime Minister Donald Tusk to stress that Warsaw's ties with Washington remain crucial for national security, highlighting Poland's reliance on U.S. commitments.
- Defense Spending Plans: Poland aims to increase its defense spending to 4.8% of GDP by 2026, which not only underscores its position as NATO's largest defense spender relative to its economy but also demonstrates Poland's strategic resolve in facing an increasingly assertive Russia.
- Collaboration with Honeywell: Tusk emphasized the value of the transatlantic alliance during the signing of an agreement with U.S. company Honeywell to establish an engine service center for Abrams tanks, further solidifying Poland's image as a loyal ally of the U.S.
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See More
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- Technological Edge: Utilizing trapped-ion quantum computers, Quantinuum employs lasers to suspend individual atoms, yielding qubits with exceptionally high fidelity and long coherence times, and this full-stack approach enhances error correction compared to Rigetti Computing's superconducting qubits.
- Financial Performance: In 2025, Quantinuum generated $30.9 million in revenue, a 35% year-over-year increase, yet net losses widened to $192.6 million, reflecting substantial investments in R&D and marketing, indicating that commercialized quantum AI solutions are still in development.
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See More
Honeywell's Underperformance Affects Dow Jones Index
- Dow Component Changes: Honeywell replaced Raytheon Technologies in the Dow on August 31, 2020, but has only delivered a 56.2% total return since then, significantly lagging behind RTX's 231.1%, indicating its failure to meet market expectations.
- Unfulfilled Innovation Potential: Although Honeywell was viewed as a diversified and innovative industrial giant in 2020, its persistent underperformance in earnings and free cash flow growth, partly due to supply chain and inflationary pressures, has hindered its ability to capitalize on its strengths.
- Spinoff Plans Generate Interest: In November 2024, activist investor Elliott Investment Management amassed a position exceeding $5 billion, prompting Honeywell to consider a breakup; the successful spinoff of Solstice Advanced Materials in October 2025, which saw a 79.4% gain, highlights the potential for growth through such restructuring.
- Future Outlook and Market Reaction: Honeywell plans to spin off its aerospace division on June 29, 2024, with the remaining business focusing on industrial and building automation, and the market anticipates that this structural adjustment could enhance its standing in the Dow, reflecting a broader preference for focused companies.
See More
U.S. Defense Budget Soars, Benefiting Defense Stocks
- Defense Budget Surge: The U.S. defense budget surpassed $1 trillion in 2023, with projections of reaching $1.5 trillion in 2024, reflecting a strong focus on modernization and military rebuilding, which is expected to drive up related defense stocks.
- RTX's Market Position: As one of the world's largest aerospace and defense companies, RTX is well-positioned to benefit from the $24.4 billion 'Golden Dome' initiative by providing layered defense solutions, thereby solidifying its market position amid rising defense budgets.
- Honeywell's Spin-off Strategy: Honeywell is undergoing a massive transformation by spinning off its aerospace segment into an independent company, which is expected to unlock value for investors, especially with a $500 million agreement with the U.S. Department of Defense to boost production of critical components.
- Rocket Lab's Contract Wins: Rocket Lab secured an $816 million prime contract to design and manufacture 18 missile-defense satellites, showcasing its strong growth potential in the defense sector, while reporting $200 million in revenue for Q1, exceeding market expectations and enhancing its market appeal.
See More
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- FAA Certification Progress: Joby Aviation and Archer Aviation are accelerating the commercialization of electric vertical takeoff and landing (eVTOL) aircraft, with Archer completing the third stage of the FAA's four-stage certification process, becoming the first U.S. eVTOL company to do so, while Joby has successfully flown its first FAA-conforming aircraft, marking its entry into the final stage, which lays the groundwork for future commercial operations.
- Operational Plans: Both companies expect to begin U.S. operations in 2026 under a White House program, which will bring them closer to putting paying passengers in the air; although both stocks are risky, this progress indicates growing market confidence in the eVTOL concept.
- Business Model Differences: Joby Aviation adopts a vertically integrated business model, planning to manufacture its own parts and operate its aircraft through an air-taxi service similar to Uber, which, while requiring higher upfront R&D investment, could lead to higher profit margins in the long run.
- Supply Chain Control: In contrast, Archer Aviation outsources many components to reputable suppliers like Molicel and Honeywell, a strategy that may accelerate short-term progress but reduces its control over the supply chain, potentially impacting its long-term competitiveness.
See More
