3 Reasons to Buy Honeywell Stock Like There's No Tomorrow

Honeywell (HON) is one of those companies that feels like a secret your friends haven’t discovered yet—but trust me, the secret’s about to blow up. With a P/E ratio at a 5-year low, a strategic reorganization set to unlock massive value, and growth engines firing on all cylinders, this stock is primed for a breakout. Let’s dive into the three reasons you need to act now, before the crowd catches on.

1. The Financials Are Cooking—And the Backlog Is Smoking Hot

Honeywell isn’t just keeping up with the Joneses; it’s leaving them in the dust. In Q1 2025, sales hit $9.8 billion, up 8% year-over-year, while adjusted EPS surged 7% to $2.51, crushing analyst estimates. But here’s the kicker: its backlog is up 8%, fueled by Building Automation (19% organic growth) and Energy & Sustainability Solutions. These aren’t just numbers—they’re proof that honeywell is locking in long-term contracts in booming sectors like green energy and smart infrastructure.

Take a look at the Aerospace division: sales jumped 14%, driven by commercial airlines upgrading their fleets and governments pumping money into defense. Even better, Warehouse and Workflow Solutions (part of Industrial Automation) are booming, offsetting softer demand in Europe. This isn’t a one-trick pony—this is a company with four distinct growth engines, all firing in different markets.

2. The Spin-Off Play Is a Game-Changer

Honeywell’s plan to split into three independent companies by late 2026 isn’t just a reorg—it’s a value-unlocking machine. By separating into Advanced Materials, Automation and Aerospace, and a dedicated Energy & Sustainability Solutions entity, Honeywell is letting each division focus like a laser on its market. This isn’t just shareholder-friendly—it’s Wall Street’s wet dream.

Consider the math: when companies spin off divisions, the sum of the parts often exceeds the whole. Think 3M’s spin-off of its health tech division or GE’s split into three giants—both created massive wealth for investors. Honeywell’s move is similar, but with a twist: it’s targeting industries primed for growth. The $2.2 billion acquisition of Sundyne, a leader in critical flow solutions, gives the company a leg up in energy and industrial markets. Meanwhile, the sale of its PPE business—while painful in the short term—lets Honeywell redeploy capital into higher-growth areas.

The company’s $25 billion capital allocation plan through 2025 includes $1.9 billion in Q1 buybacks alone. That’s not just shareholder love—that’s a signal.

3. The Valuation? A Bargain Bin Gem

Here’s where the math gets juicy. Honeywell is trading at a forward P/E of 20x based on 2025 EPS guidance of $10.30. That’s a 30% discount to its five-year average P/E of 23x, even as earnings keep rising. For a company generating $5.4–$5.8 billion in free cash flow annually, this is a screaming deal.

Let’s break it down:
- Risk-Adjusted Growth: While Industrial Automation stumbled (a 2% organic dip), the rest of the business more than made up for it. Margins stayed steady at 23% despite headwinds.
- Macro Hedge: Honeywell’s diversified portfolio means it’s less reliant on any single economy. The Middle East is gushing cash into Building Automation, while U.S. defense spending props up Aerospace.
- Catalysts Ahead: The spin-offs, strong free cash flow, and a revised 2025 EPS guidance of $10.20–$10.50 (up from prior estimates) mean the stock could finally get the respect it deserves.

Conclusion: Buy Now—Before the Crowd Catches On

Honeywell isn’t just a stock—it’s a strategic bet on the future of automation, energy, and defense. With a P/E at 20x vs. a 23x five-year average, a backlog that’s growing faster than its sales, and a reorganization that could unlock billions in value, this is a no-brainer.

The risks? Sure—tariffs and European weakness in Industrial Automation are real. But Honeywell’s cash flow, margin discipline, and multi-year growth plans overshadow them. If you’re looking for a stock that’s cheap, diversified, and set to explode, this is your call. Don’t wait—act now before the spin-offs make this stock a household name.

Final Takeaway: Honeywell is a value trap turned value powerhouse. At current levels, it’s priced for pessimism but built for prosperity. This is a buy, buy, BUY.