Honeywell Aerospace Inc. is entering the post-earnings phase with a notable split: the Street's most influential voice just turned bullish, while the stock continues to bleed lower.
The standout this week is Morgan Stanley's move on Tuesday. Analyst Kristine Liwag upgraded HONA from Equal-Weight to Overweight, keeping her $205 target in place — a signal that Morgan Stanley sees the post-earnings selloff as having overshot fundamentals rather than accurately priced in structural damage. That upgrade carries weight, arriving just days after the August 14 earnings release, which itself delivered a further 4.9% single-day decline. The stock is now at $160.76, down 3.1% on the week and 24% on the month. The gap between the current price and Morgan Stanley's $205 target implies around 27% upside from here, making this a meaningful vote of confidence at a depressed entry point.
The broader analyst community is less enthusiastic, though not outright bearish. BMO Capital trimmed its target sharply — to $209 from $276 — on August 10, maintaining Outperform but clearly acknowledging the scale of the earnings damage. Several other firms cut targets in the $210–$250 range on August 6, immediately following the Q2 collapse, while holding positive or neutral ratings. The consensus sits at Hold with nine analysts there and two at Outperform. Mean price target data with analyst counts suggests the consensus still sits well above the current price, though the cluster of recent target reductions signals the Street is recalibrating its earnings model rather than abandoning the thesis. The valuation picture adds some context: the trailing PE has compressed to roughly 19x, down almost 3 points over the past month, while EV/EBITDA has drifted modestly higher to 10.6x.
Options positioning has eased considerably since the pre-earnings anxiety peak. The put/call ratio, which reached 0.76 — nearly three standard deviations above its 20-day average — in the days before the August 14 print, has retreated to 0.66 against a 20-day mean of 0.59. That is just 0.6 standard deviations above average, a marked normalization. The shift suggests hedging demand has unwound now that the event risk has passed. The borrow market tells a similarly relaxed story. Availability has surged to over 5,200% — more than doubling on the week — meaning the lending pool is extraordinarily loose relative to shares already borrowed. Cost to borrow, while up roughly 40% on the week, remains negligible at 0.41%. None of this describes a crowded short.
Short interest itself reinforces the picture. Shorts held around 7.6 million shares on August 18, down 11% on the week and 42% over the past month. The sharpest drop came in late July, when short interest fell from roughly 13 million shares to under 8 million in the span of a few days — a meaningful cover. Since then, the position has drifted modestly lower still. Borrow conditions provide no constraint on rebuilding those shorts if sentiment turns, but the data shows no appetite for that right now. The ORTEX short score has eased to 32.1 from a high of 34.3 a week ago, consistent with the directional reduction in short positioning.
The next scheduled earnings event is November 6. Between now and then, the key question is whether Morgan Stanley's upgrade draws further conviction from other bellwether names — or whether the wave of target cuts from BMO, UBS, BNP Paribas, RBC, and Evercore in early August more accurately reflects where consensus earnings estimates are headed after two consecutive disappointing prints.
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