Al Root

Honeywell stock has had a rocky year. Now, shares look ready to break out.

Barron's wrote positively about Honeywell in June 2024 when shares traded for about $213. It was a rocky ride for that pick. Honeywell stock went on to trade below $180 in April before recovering. Coming into Thursday trading, shares were up about 12% since the article appeared. The S&P 500 is up about 14% over the same span.

About half of Honeywell's gain has come in the past month, however, leaving the stock chart looking attractive to traders.

"Honeywell has a pending breakout above long-term resistance that goes back to the 2021 high, near $237," says Fairlead Strategies analyst Will Tamplin. "If it can close above that level next week, it would confirm a breakout in a bullish long-term development....we can generate a measured move price objective of roughly $300, which is likely more realistic for some time in 2026."

A breakout is a term technical analysts use to describe when a stock rises above some resistance, or a level where investors have sold stock and taken profits in the past. A $300 target next year implies a gain of roughly 25% from recent levels.

Tamplin isn't making a fundamental call on Honeywell stock. He's looking at stock charts and market history to understand investor sentiment, which appears to be improving.

There are a few reasons for that. For starters, business is getting better. Wells Fargo analyst Joseph O'Dea sees a guidance increase coming when Honeywell reports second-quarter earnings in a few weeks. "This quarter favors Honewyell on upside to industrial automation and building automation [business segments]," wrote O'Dea earlier this week. "We see the [Earnings per share guidance] range moving up at both the long and high end."

Honeywell's current 2025 earnings-per-share guidance is $10.20 to $10.50. Wall Street models about $10.40, according to FactSet. O'Dea sees earnings topping $10.50 a share. He rates Honeywell stock at Hold but took his price target up to $240 from $225.

Then there is the business breakup. In February, Honeywell laid out plans to separate into three companies: One dedicated to automation, one to aerospace, and another to advanced materials. Automation is the largest business, with about $18 billion in annual sales. Aerospace revenue is in the range of $15 billion. Advanced Materials is the smallest business, with about $4 billion in annual sales.

Barclays analyst Julian Mitchell believes the aerospace business deserves a higher valuation. GE Aerospace stock, for instance, trades for about 44 times estimated 2025 earnings. Honeywell stock trades for about 23 times. He rates Honeywell stock at Buy and has a $258 price target.

To be sure, there are always risks. CappThesis founder and market technician Frank Cappelleri notes there is some resistance around $240, meaning Honeywell's rally could stall out here. He recommends waiting for a pullback and buying a dip.

Riding the rally or buying the dip, either way, Honeywell stock is worth watching, and a strong second-quarter earnings report would bring new highs into play.

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

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July 03, 2025 11:47 ET (15:47 GMT)

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