Morgan Stanley upgrades Resideo Technologies to Overweight, raises price target to $35.

Resideo Technologies (REZI) surged 14% after Morgan Stanley upgraded the stock to Overweight from Equalweight, increasing the price target to $35 from $24, implying 27% upside.

Resideo Technologies (REZI) saw a significant boost in its stock price on Tuesday, surging 14% following an upgrade from Morgan Stanley. The investment bank upgraded the stock to Overweight from Equalweight and increased its price target to $35 from $24, implying a potential 27% upside [1].

The upgrade comes on the heels of Resideo’s strong second-quarter results, which exceeded the high end of guidance and marked the strongest quarter of organic revenue growth in 15 quarters. The company has also delivered nine consecutive quarters of gross margin expansion in its Products & Solutions segment [2].

Morgan Stanley cited the recent cancellation of Resideo’s longstanding and complex indemnification agreement with Honeywell (NASDAQ:HON) as a key factor in the upgrade. This move removes a structural impediment for investors and creates a path to approximately $3 in earnings power. The firm’s calendar year 2026 non-GAAP EPS estimate of $3.02 stands 23% above consensus expectations [1].

Additionally, Morgan Stanley highlighted Resideo’s plan to separate its ADI Global distribution business in the second half of 2026 as another catalyst that could unlock value through a sum-of-the-parts approach. The new price target reflects a price-to-earnings multiple of approximately 13x for Resideo’s core Products & Solutions business and 12.5x for ADI Global, with a 10% discount applied to account for execution risk in the planned spinoff transaction [1].

In other recent news, Resideo Technologies Inc. reported robust financial results for the second quarter of 2025, outperforming both earnings and revenue expectations. The company achieved an earnings per share of $0.66, surpassing the anticipated $0.54, which represents a 22.22% surprise. Resideo’s revenue reached $1.94 billion, exceeding the forecasted $1.83 billion. These results highlight a strong performance for the company, contributing to positive investor sentiment [2].

Analysts and investors are closely monitoring these developments as they consider Resideo’s future prospects. The recent earnings report stands out as a significant event for Resideo Technologies in the financial landscape [2].

References:
[1] https://www.marketscreener.com/news/morgan-stanley-upgrades-resideo-technologies-to-overweight-from-equalweight-adjusts-price-target-to-ce7c51dad98cff27
[2] https://www.investing.com/news/analyst-ratings/morgan-stanley-upgrades-resideo-technologies-stock-to-overweight-on-earnings-potential-93CH-4184868