Honeywell Stocks Rise as it Considers Aerospace Spinning

What you need to know

• Honeywell's latest update on its ongoing portfolio review noted the company was considering spinning off its aerospace business.
• Honeywell explained that it was considering "transformational changes" in the firm.
• Elliott Investment Management – an activist investor who holds over $5 billion worth of shares and called for the shake-up of the firm – welcomed the announcement.

Honeywell International’s (HON), a conglomerate, has announced an update of its portfolio evaluation that began in early this year. The company also stated it may consider spinning off its Aerospace unit. 

Vimal Kapur, CEO of the Vimal Kapur Group, said that after realigning its business operations in January. “we have been moving swiftly and decisively to optimize the Honeywell portfolio to deliver superior growth and drive incremental shareholder value.” Kapur said that Honeywell had also been included in the list of companies. “evaluating more transformational changes.”

Kapur explained that after "portfolio enhancements" that were initiated 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."

In its earnings announcement for the fourth quarter, the company will provide a more detailed update.

Elliott 'Welcomes' Honeywell Announcement

Elliott Investment Management, an activist investor, responded to this statement by writing it was pleased that Honeywell announced the review of Honeywell’s strategic options. “including the separation of its Aerospace business.” Elliott disclosed last month it took a stake worth more than 5 billion dollars in Honeywell. It also called for the dissolution of Honeywell.

Honeywell’s shares rose by nearly 3% in the morning of Monday following last month’s Elliott news. They've gained about 12% year-to-date.

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