Honeywell International enters the back half of August with a sharp and unusual split: options traders are the most bullish they've been in a year, even as the stock drifts lower on the week.
The standout signal this week is in options. Call positioning has surged relative to puts — the put/call ratio dropped to 0.51, more than two standard deviations below its 20-day average of 0.70. That is the most call-skewed reading in the past 52 weeks, whose floor sits at 0.24 but whose typical range runs well above 0.65. The shift is abrupt: the PCR ran above 0.80 as recently as August 12, meaning the rotation into calls happened fast, over just a few sessions. Whether that reflects fresh bullish bets, unwinding of prior hedges, or positioning ahead of the October 22 earnings date is unclear from the data alone — but the move is pronounced.
The lending market tells a very different story, and it reinforces the picture that shorts are stepping back, not piling in. Short interest has fallen sharply — down nearly 20% on the week and 33% over the past month, to just 1.2% of free float. That level is genuinely low. Back in early July, shares short were running close to 18.5 million; they're now at 7.6 million, roughly half. Borrow availability has expanded dramatically alongside the short-interest retreat, climbing to over 8,000% — meaning the lending pool dwarfs current demand by a vast margin. Cost to borrow is a negligible 0.35%. There is no pressure in the borrow market, and no sign of a crowded short thesis.
The Street is broadly constructive, though with some recalibration around the edges. RBC Capital trimmed its target by $5 to $293 on Monday while keeping its Outperform rating. Jefferies initiated coverage at Hold with a $255 target. JP Morgan, also this week, shaved its target from $262 to $255 but held Overweight. Those moves follow a flush of post-earnings upgrades in late July: Bank of America lifted its rating from Underperform to Neutral and raised its target by $60 to $265, while Mizuho, BMO Capital, and Citigroup all raised targets into the $265-$279 range. The consensus mean price target is $263, against a current price of $227.71 — implying roughly 15% upside on the Street's central view, even after this week's trimming. Factor data adds texture: Honeywell ranks in the 98th percentile on EPS surprise and the 96th on dividend score, but scores only in the 25th percentile on both 30- and 90-day EPS momentum, flagging that near-term estimate revisions have been running below the broader market.
The most recent earnings print, on July 23, produced a 4.4% single-day gain and held most of that move over the following week — a clean beat-and-hold reaction. The next print is scheduled for October 22, still two months out, which gives the options positioning plenty of time to either build further or rotate back.
The key tension to watch: whether the call-heavy options tilt reflects genuine conviction in the bull case — Honeywell's aerospace and automation exposure, margin expansion trajectory, and dividend reliability — or is simply a short-dated position wash in a low-SI, low-borrow environment where shorts have already been squeezed out. The next data point worth monitoring is whether the PCR sustains below 0.60 into September, or reverts toward its longer-run average as the earnings date approaches.
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