Honeywell Aerospace's (HONA) auxiliary power unit, or APU, portfolio is under-appreciated by investors, and the company's strength in the business jet engine market is "substantial," RBC Capital Markets said in a Monday research note.

The company has almost 20,900 APUs in service across in-service Airbus and Boeing (BA) aircraft, RBC said, adding that Honeywell Aerospace anticipates growing its total APU portfolio at a compound annual growth rate of 5% through 2030, equaling to about 5,800 additional APU sales.

RBC further noted that while the company's share on business jet avionics has declined about 4% since 2015, its engine share has grown by about 4% as well. Honeywell Aerospace's commercial retrofit, modification, and upgrade, or RMU, investments will help offset some of the lost share, according to the note.

RBC added that it believes continued supply chain improvement will be a positive for execution sentiment, and that investors are still early in the Honeywell Aerospace discovery phase.

Honeywell Aerospace will issue its Q2 financial results on August 5.

RBC maintained the company's outperform rating with a $300 price target.

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