Honeywell International (HON) is the best Dow Jones stock Monday after the multinational conglomerate announced it was exploring strategic alternatives to unlock shareholder value, including a potential separation of its aerospace business.
"Following the portfolio enhancements announced 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," said Honeywell CEO Vimal Kapur in a statement.
The announcement comes just over a month after activist investor Elliott Investment Management built a stake worth more than $5 billion in Honeywell, with the goal of pushing for a breakup of the company.
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"Elliott welcomes Honeywell's announcement today of its ongoing review of strategic alternatives, including the separation of its aerospace business," Elliott said in a statement. "We believe the portfolio transformation Vimal and his team are leading represents the right course for Honeywell, and we look forward to the upcoming completion of the review and to supporting Honeywell as it implements the necessary steps to realize its full value."
Is Honeywell stock a buy, sell or hold?
Honeywell is up nearly 13% for the year to date and Wall Street is bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for HON stock is $242.55, representing implied upside of roughly 3% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Argus Research is one of those with a Buy rating on HON along with a $240 price target.
"We believe that Honeywell will continue to benefit from its diverse product lines, as well as from its alignment with three key megatrends – supply chain automation, aerospace & defense, and energy and sustainability," wrote Argus Research analyst Kristina Ruggeri in a November 20 note. "Over the last year, Honeywell has made four key acquisitions to support these trends and has disposed of several non-core businesses. These actions should help simplify the company and increase revenue, margins and productivity in the long-term."
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