Adds CEO, CFO comments from third paragraph

By Sabrina Valle

NEW YORK, June 11 (Reuters) - Honeywell HON.O on Thursday said it is targeting deals valued at $2 billion to $4 billion and sees scope for acquisitions in its industrial automation business.

"There is a ton of opportunity for M&A,” Peter Lau, president of Honeywell’s Industrial Automation unit, said during the company's investor day in New York, adding the business operates in a roughly $35 billion market.

At the group level, Honeywell signaled it will pursue bolt‑on deals within its preferred $2 billion to $4 billion range. That compares with a previous preferred deal size of $1 billion to $7 billion.

Honeywell has deployed about $14 billion on roughly 10 acquisitions in past years, focusing on $1 billion to $2 billion bolt-on deals. The company has paired those deals with divestitures and planned spinoffs to simplify its structure.

Asked if larger acquisitions are off the table, Chief Executive Vimal Kapur told an audience of investors that, while the scenario can always change, the company does not currently "see any necessity to go away from our fundamental strategy."

The price range would rule out an acquisition of precision instruments and sensor maker Ralliant RAL.N, a $7 billion market cap company that analysts have previously speculated as a potential target.

Lau said Honeywell sees Ralliant as a peer, together with measurement and instrumentation companies like Ametek AME.N, Teledyne TDY.N and Idex IEX.N that operate in similar niche businesses.

CFO Mike Stepniak said Honeywell will prioritize debt reduction, organic investment and shareholder returns before jumping to more sizeable M&A.

"We will be thoughtful and will be patient. There is no urgency," Stepniak said.