On Monday, Honeywell International Inc. (NASDAQ:HON), a $153.58 billion industrial conglomerate with a solid financial health rating according to InvestingPro, received a reiteration of its Neutral rating and $240.00 price target from BofA Securities. This follows a recent announcement by Honeywell regarding the advancement of its portfolio evaluation, which includes considering the separation of its Aerospace business. The evaluation process was initiated earlier in the year under the direction of Chairman and CEO Vimal Kapur.
The company's announcement comes after Elliott Investment Management disclosed on November 12 that it had acquired a stake exceeding $5 billion in Honeywell. Elliott has been advocating for the conglomerate to divide into two independent publicly traded entities: Honeywell Aerospace and Honeywell Automation.
Elliott welcomed the company's latest announcement, indicating a positive engagement between the two parties. With annual revenue of $37.85 billion and a P/E ratio of 27.08, InvestingPro analysis suggests the stock is trading at premium valuations relative to near-term earnings growth.
Honeywell has a history of strategic moves aimed at enhancing shareholder value, including its previous spin-off of the Advanced Materials business. Analysts believe that Honeywell's ongoing efforts to improve operations and streamline its portfolio will likely continue to be the main drivers of value creation.
However, it was noted that stock performance might remain relatively unchanged during the period leading up to the actual separation. Honeywell is expected to provide a formal update on the portfolio review process along with its fourth-quarter 2024 earnings release.
The completion of the breakup is anticipated to take approximately 18 months from the initial announcement. Additional details, such as leadership roles and the composition of the Board of Directors for the resultant companies, are also considered crucial elements of the transition.
In other recent news, Honeywell International Inc. is exploring the possibility of separating its aerospace division. This decision is part of an ongoing portfolio review, following a push from Elliott Investment Management, an activist investor that acquired over $5 billion in Honeywell shares. Elliott has expressed support for Honeywell's strategic direction under the leadership of CEO Vimal Kapur.
Honeywell also recently disclosed its plans to sell its personal protective equipment business to Protective Industrial Products for approximately $1.33 billion. In addition to this, the company has expanded its portfolio through strategic acquisitions, including the purchase of Carrier's security business for $4.95 billion and the acquisition of aerospace and defense company CAES Systems for $1.9 billion.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.