- Honeywell stock gains on announcement of likely spinoff of aerospace unit.
- HON stock ramps up over 4% on Monday.
- The announcement follows a deal with Bombardier earlier this month that was expected to dent earnings.
- Hedge fund Elliot Management praises the announcement.
Honeywell International (HON) stock has climbed 4.4% on Monday afternoon after Wall Street warms to a possible spinoff of the industrial heavyweight’s aeronautics division could streamline the capital intensive company’s balance sheet.
The Dow Jones Industrial Average (DJIA), which houses Honeywell as one of its 30 index constituents, sank lower on continued weakness by UnitedHealth Group (UNH), one of its largest holdings. This was the opposite direction of the NASDAQ Composite, which rallied 1.3% at the time of writing.
Honeywell stock news
Honeywell’s Chairman and CEO, Vimal Kapur, released a statement on Monday saying that the aerospace unit is being sized up for a possible separation from the main company’s other two divisions: Automation and Energy Transition. The CEO said to expect further news on this front at the company's next earnings release, currently slated for February 6 next year.
"Following the portfolio enhancements announced earlier this year, Honeywell is now well-positioned for significant transformational alternatives, and we are continuing our deeper, more granular exploration of their feasibility and possible timing," Kapur said. "Honeywell's Board of Directors remains committed to maximizing shareholder value creation, and any decision will be evaluated against that goal."
Honeywell announced in early December that a new partnership with Canadian aviation firm Bombardier would require extensive capex. This deal would lead to a 17% reduction in projected per share earnings in the fourth quarter, a detail that led HON stock to sell off on December 3.
What Kapur did not mention is that much of the pressure for a spinoff likely stems from Elliott Investment Management, the activist hedge fund run by Paul Singer that announced a $5 billion stake in Honeywell in November. It was known immediately that Elliot was seeking to force a split of the automation and aerospace assets.
In late November, Honeywell had already announced the sale of its Personal Protective Equipment unit to a private equity firm for more than $1.3 billion in cash.
Elliott partners Marc Steinberg and Jesse Cohn released a statement praising the new vision of Honeywell’s C suite.
“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,” reads the statement from the hedge fund.
In October, Honeywell had announced a separate spinoff to shareholders of its Advanced Materials unit. The company expects the spinoff will be completed by late 2025 or early 2026.
HON daily stock chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds positive ground above 1.0950 ahead of US CPI release
The EUR/USD pair attracts some buyers to around 1.0980 during the Asian session on Thursday. The Euro edges higher against the Greenback as German conservative leader agreed on a coalition deal with the center-left Social Democrats on Wednesday.
GBP/USD trades near 1.2850 after recovering recent losses, BoE's Breeden speech awaited
GBP/USD recovers its daily losses and continues its winning streak for the third successive session, hovering around 1.2850 during Asian trading hours on Thursday. The British Pound came under pressure following the release of weaker-than-expected data from the RICS Housing Price Balance.
Gold price rallies further beyond $3,100; eyes all-time high amid US-China tariff war
Gold price continues to attract safe-haven flows amid rising US-China trade tensions. Bets for multiple Fed rate cuts weigh on the USD and also benefit the precious metal. A solid recovery in the risk sentiment fails to undermine the safe-haven XAU/USD pair.
XRP back above $2 liquidating $18M in short positions, will the rally continue?
Ripple seeks support above $2.0020 on Thursday after gaining 14% in the past 24 hours. The token trades at $2.0007 at the time of writing, reflecting growing bullish sentiment across global markets.
Tariff rollercoaster continues as China slapped with 104% levies
The reaction in currencies has not been as predictable. The clear winners so far remain the safe-haven Japanese yen and Swiss franc, no surprises there, while the euro has also emerged as a quasi-safe-haven given its high liquid status.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.