r/valueinvesting
Honeywell Stock Jumps as Breakup Nears - Barron’s
Honeywell's upcoming breakup into Aerospace and Automation units drives stock gains as investors see valuation upside vs. peers.
- Breakup into Aerospace and Automation will unlock hidden value by allowing each unit to trade at higher peer-matching P/E multiples.
- Automation unit targets 4-6% sales growth and margin expansion to 24%, implying double-digit EPS growth.
- Aerospace unit targets 6-8% sales growth and margin expansion, leading to low double-digit earnings growth.
- Ultimate value generation heavily depends on management successfully executing and delivering the expected growth and margin targets.
Honeywell Stock Jumps as Breakup Nears - Barron’s
By Al Root
Updated June 11, 2026 4:37 pm EDT / Original June 11, 2026 7:46 am EDT
https://www.barrons.com/articles/honeywell-automation-stock-aerospace-breakup-73257b66
Key Points
\- Honeywell Automation aims for 4% to 6% annual sales growth and to expand profit margins to 24% over three years.
\- Honeywell is splitting into two companies, with Aerospace targeting 6% to 8% annual sales growth and margin expansion.
Honeywell’s other business laid out its case to investors on Thursday. So far, investors are impressed.
The industrial conglomerate is on the cusp of a breakup that will create two multibillion-dollar companies; one dedicated to aerospace and the other to automation. Last week, Honeywell Aerospace hosted an investor event. Today, it’s Honeywell Automation’s turn.
Automation hosted an investor event in New York City. Ahead of the meeting, the company laid out its financial algorithm.
Honeywell’s automation businesses generate annual sales of about $17 billion, and operating profit margins of about 21%, selling hardware, software, and services into the commercial building, energy, and industrial markets. The goal is to grow top-line sales by 4% to 6% a year, and expand profit margins to about 24% over the next three years. That should generate double-digit earnings-per-share growth.
That’s similar growth to the likes of Emerson Electric , Rockwell Automation, and Schneider Electric. Those three stocks trade at an average of about 25 times expected earnings over the coming 12 months. Honeywell stock trades for closer to 19 times.
Honeywell Aerospace plans 6% to 8% annual sales growth and margin expansion, which should lead to low-double-digit earnings growth.
Aerospace stocks also trade at higher price-to-earnings ratios than Honeywell. Management hopes the breakup generates value by creating the right comparisons.
Ultimately, value generation will depend on producing the expected growth and margin expansion at Honeywell Aerospace and Honeywell Automation.
For now, investors like the targets. Honeywell stock rose 6.4% on Thursday, closing at $219.12. The S&P 500 and Dow Jones Industrial Average added 1.8% and 1.9%, respectively.
Coming into Thursday trading, Honeywell stock was up 6% this year and down 3% over the past 12 months. Investors might have been waiting for the spin before considering shares. The breakup is expected to be done on June 29.
Don't these usually dump right after the split?
Which ?
In the case of GE the ceo went with the better biz the aerospace but the power generation is ging shareholder a better return.
SOLS and Q have done very well from their spinoffs back in Q3 2025. I'm stoked for HONA, gonna be buying immediately and throughout the rest of the year.
A longer article on the same subjection was posted on my Reddit page today, it looked at the fundamentals between the two companies.
Ping me if you can’t find it.
Very surprised that the stock hasn’t been doing better