DCF Studio

    HON · NMS · Industrials

    Honeywell International Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 112.56

    Market price

    USD 223.77

    Implied upside

    -49.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 112.56-49.7%
    Exit multiple
    USD 107.15-52.1%
    Market price
    USD 223.77

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 20.2bnUSD 20.5bnUSD 20.9bnUSD 21.3bnUSD 21.7bnUSD 22.2bnUSD 22.7bnUSD 23.2bnUSD 23.8bnUSD 24.3bn+2.1%
    EBITUSD 3.7bnUSD 3.8bnUSD 3.8bnUSD 3.9bnUSD 4.0bnUSD 4.1bnUSD 4.2bnUSD 4.3bnUSD 4.4bnUSD 4.5bn+2.1%
    NOPATUSD 3.0bnUSD 3.0bnUSD 3.1bnUSD 3.1bnUSD 3.2bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bn+2.1%
    Add depreciation & amortisationUSD 678.3mUSD 690.1mUSD 702.8mUSD 716.4mUSD 731.0mUSD 746.5mUSD 763.0mUSD 780.7mUSD 799.5mUSD 819.4m+2.1%
    Less capital expenditureUSD -481.1mUSD -546.1mUSD -613.8mUSD -684.4mUSD -758.3mUSD -835.6mUSD -916.7mUSD -1.0bnUSD -1.1bnUSD -1.2bn+10.5%
    Capex, % of revenue2.4%2.7%2.9%3.2%3.5%3.8%4.0%4.3%4.6%4.9%-
    Less increase in working capitalUSD 3.5bnUSD -70.7mUSD -75.8mUSD -81.1mUSD -86.7mUSD -92.6mUSD -98.8mUSD -105.3mUSD -112.1mUSD -119.3m-
    Free cashflow to firmUSD 6.6bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bn-8.2%
    Discount factor0.96510.89900.83730.78000.72650.67670.63030.58710.54690.5094-
    Present valueUSD 6.4bnUSD 2.8bnUSD 2.6bnUSD 2.4bnUSD 2.2bnUSD 2.1bnUSD 1.9bnUSD 1.8bnUSD 1.7bnUSD 1.6bn-
    Present Value Of The ForecastUSD 25.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.918Reported 0.878, pulled toward 1.0 (Blume)
    Cost of equity8.78%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.9x interest cover. Book interest / average debt was lower, at 4.0%.
    Market capitalisationUSD 70.9bn66.6% of capital
    Total debtUSD 35.6bn33.4% of capital, book value as a proxy
    Tax rate20.2%Effective, capped at statutory
    WACC7.36%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 112.56

    57% of EV

    Forecast FCFF, final year
    USD 3.1bn
    Capex at depreciation, working capital in reinvestment
    USD 3.9bn
    Less reinvestment at g/ROIC (20.6% of NOPAT)
    USD -807.8m
    Capitalised
    USD 3.1bn
    ROIC (reported)
    12.1%
    Terminal value, undiscounted
    USD 65.6bn
    Terminal value, discounted
    USD 33.4bn
    Enterprise value
    USD 58.8bn
    Less net debt
    USD 22.6bn
    Equity value
    USD 36.2bn

    Exit at 11.8x EBITDA

    Value per shareUSD 107.15

    55% of EV

    Terminal value, undiscounted
    USD 62.2bn
    Terminal value, discounted
    USD 31.7bn
    Enterprise value
    USD 57.1bn
    Less net debt
    USD 22.6bn
    Equity value
    USD 34.4bn

    Spread between methods: 5%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.36%189.13204.61225.97256.97305.36
    6.36%138.89145.71154.63166.59183.18
    7.36%105.78108.74112.57117.54124.12
    8.36%82.3183.3684.7886.6989.21
    9.36%64.8064.8465.0465.4566.11

    Outlined: this model. Green text: above today's price of 223.77. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year1.8%-4.2%1.6%
    EBIT margin19.2%18.3%31.2%
    Discount rate-7.4%5.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.