Honey, I shrunk the company
By Ken Showers, Managing Editor
Updated 3:36 AM CST, Wed February 12, 2025
This week in industry news, Honeywell honeycombs into three distinct hives full of busy bees, but the buzz around the move indicates a bumble.
Last week Honeywell made good on months of speculation that the company would bow to pressures from an activist investor and spun out into three separate divisions. Those divisions are its aerospace, advanced materials, and home automation divisions.
So, while this split rolls back the meter a bit on Honeywell’s conglomeration, it is also theoretically a way to straighten out priorities for the divisions, and especially for shareholders. Naturally that means that its stock took an ugly nosedive of roughly 10% since that time.
I will never ever promise that I can parse the dark mysticism that encapsulates international trade but it’s probably not the outcome Elliot Investment Management had in mind when they estimated the stock would be propelled upward as much as 51-75% in the next two years.
It’s off to a bad start. It will also be a good long while before Honeywell completes the transitions in spinning off these companies, with an estimated target of the second half of 2026. So, if you have stock in Honeywell buckle up, because I think it’s going to be a wild ride for a while, all the other craziness in the world notwithstanding.
I think a lot of the large corporations with diversified holdings are going to be looking at this situation closely while they judge the merit of it before taking similar actions
But I’ve droned on too long, enjoy the sweet nectar of your freedom.
Comments