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Honeywell Aerospace debuts on Nasdaq

Honeywell Aerospace's Nasdaq debut on Monday saw a 7% rise in its shares, marking a new step in Honeywell's three-way split.

Shares of the aerospace engine, 'parts and defence systems maker opened at $236.78 each, compared to $221.01 last week at the close of "when-issued", which began earlier in this month.

Honeywell announced that it will separate into three independent companies in 2025. These companies will focus on automation, advanced materials and aerospace. The process is expected to be completed this year.

Honeywell Aerospace has listed to follow GE Aerospace's conglomerate split-up, aiming to improve performance by streamlined and specialized operations.

Ken Herbert, an analyst at RBC, said that HONA's aftermarket growth was significantly lower than its peers under Honeywell legacy reporting. This is largely because of execution and supply-chain challenges.

We believe that a better execution and a greater focus on RMUs will help HONA achieve its improved?AM Right to Price.

Honeywell Aerospace produces engines, electronics, and systems for aircraft and spacecraft, for customers such as Boeing, Airbus, and airlines, as well for the U.S. Military.

The launch of the new aircraft comes at a time when investors are clamoring for aerospace and defence assets due to?pent up demand and increasing military spending.

U.S. president Donald Trump met in March with munitions manufacturers, including Honeywell Aerospace. His administration is pushing to?expand weapons production, after military operations against Iran and other 'conflicts' dwindled U.S. stocks.

The company will invest $500 million as part of a deal made with the Pentagon the same'month, joining RTX & Lockheed Martin - to increase precision-guided munitions and missiles production.

Honeywell Aerospace announced to investors earlier this month that they expect to "book $6.5 billion of adjusted earnings" by 2030. This is due in part to the strong demand from jetmakers and defense customers.

It is expecting sales to grow by 7% to 10% this year, and to generate a free cash flow between $1 billion and $1.5 billion. Reporting by Aatreyee Dasgupta, Bengaluru. Editing by Joyjeet Das

(source: Reuters)