Activist investor Elliott appears close to winning a breakup argument with the industrial giant.
In the closing of the recent trading day, Honeywell International Inc. (HON) stood at $220.17, denoting a -0.21% change from the preceding trading day.
HON is making strides in the key end markets, which makes the stock worth a watch amid certain headwinds.
HON benefits from strength in its Aerospace unit, acquired assets and shareholder-friendly policies. Softness in the warehouse and workflow solutions unit and high operating expenses remain concerning.
Innovative Solutions and Support reported strong Q4 results, with 18.4% revenue growth, despite margin pressure due to increased cost of sales and military sales. Operating income grew 19.5% and adjusted EBITDA increased by 17%, with free cash flow improving significantly from $1.8 million to $5.1 million. Risks include integrating new product lines and margin pressures. But opportunities lie in higher MRO volumes, insourcing, and leveraging the Honeywell acquisition.
The latest trading day saw Honeywell International Inc. (HON) settling at $226.88, representing a +0.01% change from its previous close.
Wolfe Research analyst sees Honeywell's Quantinuum unit seeing a similar boost to IonQ, which has seen its stock price jump 225% this year.
HON is planning to sale its Aerospace business as part of its business transformation strategy that aims to unlock values for shareholders.
Honeywell International (HON) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
After Honeywell issued a press release announcing that its board has made "significant progress" on its comprehensive portfolio evaluation launched earlier this year and continues to explore strategic alternatives, including the potential separation of its Aerospace business, BofA said the release signals an Aero breakup is "likely in the works." Elliott also issued a press release today, saying that it "welcomes Honeywell's announcement," notes the analyst, who says the engagement between Honeywell and the activist "seems to be amicable." The firm, which adds that breakups create value, but notes that "stocks tend to be relatively 'stuck' as the breakup takes place," maintains a Neutral rating and $240 price target on Honeywell shares.
Honeywell International (HON) shares advanced Monday as the conglomerate issued an update on its portfolio review begun earlier this year, noting that it is considering spinning off its aerospace unit.
Industrial conglomerate Honeywell International Inc (NASDAQ:HON) said it is considering selling its aerospace unit, and expects an update in January after the release of its fourth-quarter earnings results.