MMarketMath

HON

Slow growerQuality: Medium (66/100)2 red flags

Honeywell Technologies · Industrials · Industrial Conglomerates

$214.77

52w 195.87 – 260.28

20y monthly, adjusted

Mkt cap

$68.1B

P/E

14.9

P/FCF

13.0

FCF yield

7.7%

ROE

34.0%

Shldr yield

9.6%

div 4.2% + bb 5.4%

What today's price assumes

At $68.1B, the market is pricing in 1.8% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 2.0% per year — expectations are roughly in line with history.

Simple DCF per-share range: $226 · $226 · $281 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 13.6× across 18 years, HON would trade near $275/share (25th–75th percentile: $226–$423); it trades at 10.6× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

+1.8%

Rev 5y

+2.8%

Rev 10y

−0.3%

EPS 5y

+1.8%

EPS 10y

+2.0%

FCF 5y

+0.4%

FCF 10y

+2.0%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $34.6B
2008: $36.6B
2009: $30.0B
2010: $32.4B
2011: $36.5B
2012: $37.7B
2013: $39.1B
2014: $40.3B
2015: $38.6B
2016: $39.3B
2017: $40.5B
2018: $41.8B
2019: $36.7B
2020: $32.6B
2021: $34.4B
2022: $35.5B
2023: $33.0B
2024: $34.7B
2025: $37.4B
$0$20.0B$40.0B
07
11
15
19
23

Net income

2007: $2.4B
2008: $806.0M
2009: $1.5B
2010: $2.0B
2011: $2.1B
2012: $2.9B
2013: $3.9B
2014: $4.2B
2015: $4.8B
2016: $4.8B
2017: $1.5B
2018: $6.8B
2019: $6.1B
2020: $4.8B
2021: $5.5B
2022: $5.0B
2023: $5.7B
2024: $5.7B
2025: $4.7B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Free cash flow

2007: $4.7B
2008: $2.9B
2009: $3.3B
2010: $3.6B
2011: $2.0B
2012: $2.6B
2013: $3.4B
2014: $4.0B
2015: $4.4B
2016: $4.4B
2017: $4.9B
2018: $5.6B
2019: $6.1B
2020: $5.3B
2021: $5.1B
2022: $4.5B
2023: $4.6B
2024: $5.2B
2025: $5.4B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Diluted shares (lower is better)

2008: 743.6M
2009: 755.7M
2010: 780.9M
2011: 791.6M
2012: 791.9M
2013: 797.3M
2014: 795.2M
2015: 789.3M
2016: 775.3M
2017: 772.1M
2018: 753.0M
2019: 730.3M
2020: 711.2M
2021: 700.4M
2022: 683.1M
2023: 668.2M
2024: 655.3M
2025: 642.8M
0200.0M400.0M600.0M
07
11
15
19
23

Margins

0%10%20%30%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $4.8B
2008: $2.3B
2009: $918.0M
2010: $944.0M
2011: $2.2B
2012: $1.5B
2013: $2.4B
2014: $2.4B
2015: $3.6B
2016: $4.0B
2017: $5.0B
2018: $6.3B
2019: $6.8B
2020: $6.3B
2021: $6.0B
2022: $6.9B
2023: $6.6B
2024: $4.6B
2025: $6.8B
$0$2.0B$4.0B$6.0B
07
11
15
19
23

Cash vs long-term debt

$0$10.0B$20.0B$30.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $9.1B
Q3'23: $9.2B
Q4'23: $5.8B
Q1'24: $8.2B
Q2'24: $8.6B
Q3'24: $8.8B
Q4'24: $9.2B
Q1'25: $8.9B
Q2'25: $9.3B
Q3'25: $9.4B
Q4'25: $9.8B
Q1'26: $9.1B
Q2'26: $9.7B
$0$2.5B$5.0B$7.5B
23
24
24
25
26

Net income by quarter

Q2'23: $1.5B
Q3'23: $1.5B
Q4'23: $1.3B
Q1'24: $1.5B
Q2'24: $1.5B
Q3'24: $1.4B
Q4'24: $1.3B
Q1'25: $1.4B
Q2'25: $1.6B
Q3'25: $1.8B
Q4'25: −$115.0M
Q1'26: $821.0M
Q2'26: $5.7B
$0$2.0B$4.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$9.7B+4.3%$5.7B+261.9%17.83$1.3B
Q1'26$9.1B+2.4%$821.0M−43.3%1.29−$650.0M
Q4'25$9.8B+6.4%−$115.0M−108.9%-0.18$1.2B
Q3'25$9.4B+7.0%$1.8B+29.2%2.86$3.3B
Q2'25$9.3B+8.7%$1.6B+1.6%4.90$1.3B
Q1'25$8.9B+9.4%$1.4B−0.9%2.22$597.0M
Q4'24$9.2B+58.4%$1.3B+1.7%1.96$2.3B
Q3'24$8.8B−4.3%$1.4B−6.7%2.16$2.0B
Q2'24$8.6B−6.3%$1.5B+3.9%2.36$1.4B
Q1'24$8.2B−8.0%$1.5B+4.9%2.23$448.0M
Q4'23 *$5.8B−37.0%$1.3B+23.9%1.91$3.0B
Q3'23$9.2B+2.9%$1.5B−2.4%2.27$1.8B
Q2'23$9.1B+2.2%$1.5B+17.9%2.22$1.4B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue+1.8%+2.8%−0.3%+1.0%
Operating cash flow+6.7%+0.6%+1.5%+2.9%
Free cash flow+6.3%+0.4%+2.0%+2.8%
EPS (diluted)+0.4%+1.8%+2.0%+7.2%
Equity−5.9%−4.5%−2.7%+1.8%
LT debt+19.9%+9.1%+16.8%+10.8%
Diluted shares−2.0%−2.0%−2.0%−1.3%
Stock price+7.0%+0.7%+9.1%+13.3%

$100, 3 years ago

$123vs $176 in SPY

7.0% vs 20.7%/yr

$100, 5 years ago

$104vs $181 in SPY

0.7% vs 12.6%/yr

$100, 10 years ago

$239vs $412 in SPY

9.1% vs 15.2%/yr

$100, 15 years ago

$652vs $813 in SPY

13.3% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$2.32

$29.0B created / $12.5B retained

Last 10 years

$3.57

$90.1B created / $25.2B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

14.9%

OCF ÷ (equity + debt)

OCF / EV yield

7.4%

MC vs 10× OCF

1.10

≤1 = priced under 10× OCF

Debt / FCF

5.4y

SBC / FCF

3.6%

Owner earnings

$5.2B

OCF − capex − SBC

OE yield

7.4%

Share count 5y

−0.9%

per year; negative = buybacks

Capital intensity

—

net PP&E ÷ revenue

Sales efficiency

—

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 28.8% of operating cash flow at an incremental return of 2.4% — an organically fundable growth rate of about 0.7% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

15 of 25 checks pass · 60%. Checks with structurally missing inputs are excluded.

Growth & Consistency

2/7

  • Revenue growth

    2.8% · 5y CAGR ≥ 5%

    fail

  • EPS growth

    1.8% · 5y CAGR ≥ 5%

    fail

  • FCF growth

    0.4% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    6 of 9 · up in ≥ 7 of last 10 years

    fail

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    0.6% vs 2.8% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

6/6

  • Net margin

    12.6% · ≥ 8%

    pass

  • Operating margin

    21.7% · ≥ 10%

    pass

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    34.0% · ≥ 12%

    pass

  • Cash ROIC

    14.9% · ≥ 12%

    pass

  • FCF margin

    14.5% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $6.4B vs NI $4.7B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

0/4

  • Debt payable from cash flow

    5.4y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    43% · cash ≥ 50% of LT debt

    fail

  • Leverage

    2.09 · LT debt ≤ 1.5× equity

    fail

  • Equity positive and compounding

    $13.9B · equity > 0 and grew over ~5y

    fail

  • Interest burden

    — · interest ≤ 15% of operating income

    na

Capital Allocation

3/4

  • Share count flat or shrinking

    -0.9% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    4% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    125% · dividends + buybacks ≤ 100% of FCF

    fail

  • Repurchases are a habit

    10 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

4/4

  • FCF yield

    7.7% · ≥ 3%

    pass

  • Earnings multiple

    14.9 · P/E ≤ 25

    pass

  • Price asks less than history delivered

    1.8% vs 2.0% · implied FCF growth ≤ historical FCF CAGR

    pass

  • Shareholder yield

    9.6% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202537,442—8,1274,7297.366,4089865,4222,9763,80419612,48729,04613,904643
202434,717—7,6675,7058.716,0978715,2262,9021,6551899,90627,26518,619655
202333,009—7,5635,6588.475,3407414,5992,8553,7151977,92518,35815,856668
202235,466—8,0224,9667.275,2747664,5082,7194,2001889,62716,85316,697683
202134,392——5,5427.916,0388955,1432,6263,38021710,95916,05718,569700
202032,63710,468—4,7796.726,2089065,3022,5923,71416814,27518,78717,549711
201936,70912,370—6,1438.416,8978396,0582,4424,4001539,06712,48618,494730
201841,80212,756—6,7658.986,4348285,6062,2724,0001759,28712,62818,180753
201740,53412,390—1,5452.005,9661,0314,9352,1192,8891767,05913,92416,502772
201639,30212,152—4,8126.215,4981,0954,4031,9152,0791847,84312,40919,369775
201538,58111,834—4,7686.045,5191,0734,4461,7261,8841755,4556,13118,283789
201440,30611,349—4,2395.335,0801,0943,9861,5109241876,9596,98517,657795
201339,05510,691—3,9244.924,3359473,3881,3531,0731706,4227,43317,467797
201237,6659,374—2,9263.693,5178842,6331,2113171704,6347,02012,975792
201136,5297,973—2,0672.612,8337902,0431,0911,0851683,6986,89610,806792
201032,3507,629—2,0222.594,2036443,55994401642,6506,27810,666781
200929,9516,896—1,5482.053,9466053,34191801182,8017,2648,861756
200836,556——8061.083,7918842,907811-1,4591282,0655,8657,187744
200734,589——2,4443.163,911-7674,678-767-3,9861121,829—9,293—

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗