Honeywell Stock Catches a Rare Double Downgrade. Why the Bull Case Is Toast.

Coming into Tuesday trading, shares of aerospace and automation technology provider Honeywell were off about 8% this year. (ROSLAN RAHMAN/AFP via Getty Images)

Key Points

• Honeywell stock fell 1.2% after a rare double downgrade from “Buy” to “Sell” by a BofA analyst, with a price target cut to $205 from $265.
• The analyst cited limited 2026 earnings growth and weak trading in the recently spun-off Solstice Advanced Materials as reasons for the downgrade.
• Despite the downgrade, 52% of analysts rate Honeywell stock a “Buy,” with an average price target of about $235.

Honeywell stock was falling early Tuesday after the aerospace and automation technology provider caught a rare, and in this case surprising, double downgrade from BofA analyst Andrew Obin.

Honeywell stock fell 2.4%, closing at $191.45, while the S&P 500 and Dow Jones Industrial Average dropped 0.8% and 1.1%, respectively.

Typically, analysts move ratings one notch at a time, from Buy to Hold and Hold to Sell, and vice versa. In this instance, Obin went all the way from Buy to Sell. His price target on the stock went to $205 from $265.

The cut is surprising in a couple of ways. For starters, Honeywell was a top pick for Obin heading into second-quarter earnings in July. What’s more, the stock is splitting up into two companies—one dedicated to aerospace and another to automation, which should help create shareholder value.

Aerospace stocks in the S&P 500 trade for an average of about 26 times estimated earnings expected over the coming 12 months. Automation stocks trade for about 24 times. Honeywell shares trade for about 19 times.

“History suggests simplification creates value,” wrote Obin, adding that the path for Honeywell is “challenging.” He sees limited earnings growth in 2026. What’s more, weak trading in Solstice Advanced Materials, which Honeywell just spun off, didn’t meet his expectations.

Shares of Solstice, which makes refrigerants and other materials, traded above $50 in October, but closed at $41.58 on Monday.

The call is a warning to investors looking for Honeywell to trade higher just because comparable companies have better price-to-earnings ratios. There could be some value in the spin, Obin added, but investors can probably wait until late 2026 to find out.

Not everyone agrees, though. After the ratings cut, 52% of analysts covering Honeywell stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Honeywell shares is about $235.

Coming into Tuesday trading, Honeywell stock was off about 8% this year and down about 9% over the past 12 months.

That trails behind the performance of other aerospace and automation stocks. Shares of GE Aerospace were up about 80% this year, entering Tuesday’s trading. Shares of Rockwell Automation were up about 30% so far in 2025.

GE stock trades for about 43 times earnings expected over the coming 12 months. Rockwell stock trades for about 30 times.

Write to Al Root at allen.root@dowjones.com