Key facts
- Honeywell Aerospace shares rose 7% in their Nasdaq debut on Monday.
- The company's shares opened at $236.78, up from $221.01 in 'when-issued' trading.
- Honeywell is splitting into three standalone companies: automation, aerospace, and advanced materials.
- Honeywell Aerospace expects $6.5 billion in adjusted earnings by 2030.
- The company projects sales growth of 7%-9% this year and free cash flow of $1 billion-$1.5 billion.
Honeywell Aerospace shares climbed 7% on their Nasdaq debut on Monday, marking a significant milestone in the planned three-way separation of manufacturing conglomerate Honeywell. The aircraft engine, parts, and defense systems maker opened at $236.78, a notable increase from its 'when-issued' trading price of $221.01. This move follows Honeywell's announcement to split into three independent companies focused on automation, aerospace, and advanced materials, a process expected to conclude this year.
Analysts suggest the specialized focus could improve performance, with RBC analyst Ken Herbert noting that under the legacy Honeywell structure, the aerospace division underperformed peers in aftermarket growth due to execution and supply chain issues. He believes increased focus on Retrofit, Migration and Upgrade Programs will support improved aftermarket revenue. Honeywell Aerospace supplies engines, electronics, and systems to major customers including Boeing, Airbus, airlines, and the U.S. military. The company's debut occurs amid strong investor interest in aerospace and defense assets, fueled by pent-up demand and increased military spending. Earlier this month, Honeywell Aerospace projected adjusted earnings of $6.5 billion by 2030, driven by defense sector demand, with expected sales growth of 7% to 9% this year and free cash flow between $1 billion and $1.5 billion.