Honeywell Stock Rises After Firm Considers Potential Separation Of Aerospace Business: Elliott Welcomes The Move, Retail Joins In

Shares of Honeywell International Inc. (HON) rose over 3% on Monday after the company announced that its board of directors is exploring additional strategic alternatives for unlocking shareholder value, including the potential separation of its aerospace business.

CEO Vimal Kapur said the company has been swiftly optimizing its portfolio since aligning its business this past January to three megatrends: Automation, the Future of Aviation, and Energy Transition.

“At the same time, we have been evaluating more transformational changes,” he said.

The development comes after activist investor Elliott Investment Management revealed a stake in the firm worth over $5 billion and suggested splitting the conglomerate into two separate standalone companies.

Meanwhile, Elliott Investment Management welcomed the firm’s announcement. “We believe the portfolio transformation Vimal and his team are leading represents the right course for Honeywell, and we look forward to the upcoming completion of the review and to supporting Honeywell as it implements the necessary steps to realize its full value,” the Elliott Partner Marc Steinberg and Managing Partner Jesse Cohn said in prepared remarks.

Notably, Honeywell also said it has made significant progress and plans to provide an update with its fourth quarter 2024 earnings release.

The company has announced several strategic actions to drive organic growth and simplify its portfolio. The firm announced approximately $9 billion of acquisitions that include Access Solutions business from Carrier Global, Civitanavi Systems, CAES Systems, and the liquefied natural gas (LNG) business from Air Products.

In October, the company announced plans to spin off its advanced materials business into an independent, U.S. publicly traded company. This process is targeted to be completed by the end of 2025 or early 2026.

Last month, Honeywell said it was selling its Personal Protective Equipment (PPE) business to Protective Industrial Products, Inc. (PIP), an Odyssey Investment Partners portfolio company, for $1.325 billion in an all-cash transaction.

Following the announcement, retail sentiment on Stocktwits jumped into the ‘extremely bullish’ territory (77/100) from ‘neutral’ a day ago. The move was accompanied by ‘high’ message volume.

Honeywell’s Sentiment Meter and Message Volume as of 8:25 a.m. ET on Dec. 16, 2024 | Source: Stocktwits

Retail chatter on Stocktwits indicated a positive bias for the Honeywell stock on Monday morning.

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