CHARLOTTE, N.C., Oct. 28, 2025 /PRNewswire/ -- Honeywell (NASDAQ: HON) today introduced a breakthrough technology that converts agricultural and forestry waste into ready-to-use renewable fuels for hard-to-abate sectors, such as the maritime industry. The technology produces lower-carbon marine fuel, gasoline and sustainable aviation fuel (SAF) from inexpensive and abundant biomass sources like wood chips and crop residues.

Honeywell: Investment/Business Brief (as of Oct 27, 2025)

Setup & Thesis

Honeywell is in the middle of a multi-step breakup designed to unlock value: (1) spin off Solstice Advanced Materials on Oct 30, 2025; (2) separate Aerospace and Automation into two independent companies in 2H26. The company just posted a strong Q3 and raised FY2025 EPS guidance to $10.60–$10.70 even after carving out Solstice’s Nov–Dec contribution. Honeywell+1

Near-term catalyst: Solstice spin-off (ticker: SOLS)

Record date: Oct 17, 2025.
Distribution: expected 12:01 a.m. ET, Oct 30, 2025.
Ratio: 1 Solstice share for every 4 Honeywell shares.
Listing: Nasdaq, ticker SOLS, from Oct 30, 2025.
Status: Board approval finalized Oct 16, 2025; Solstice completed a $1B senior notes offering in preparation. Honeywell International Inc.+3Honeywell+3Honeywell+3

Why it matters: Honeywell is lifting guidance even after removing the late-year Solstice piece, signaling underlying strength (Aerospace/Automation). Street coverage highlights the spin as part of a broader value-unlock program. Barron's+1

“Eventual” Quantinuum separation

Honeywell remains majority owner of Quantinuum (formed 2021 from HQS + Cambridge Quantum). Management and reporting indicate an IPO/window targeted for late-2026 to 2027, market-conditions permitting. Quantinuum raised $300M at a $5B pre-money in 2024 and ~$600M in 2025, lifting the private valuation to ~$10B. Treat as a medium-term (not next-12-months) optionality lever for HON holders. Barron's+3Honeywell+3quantinuum.com+3

Financials snapshot (Q3’25; FY’25 guide)

Q3 sales: $10.4B (+7% y/y); Adj. EPS $2.82; orders +22%; backlog at a high.
FY’25 guide (ex-post-spin Solstice months): sales $40.7–$40.9B; Adj. EPS $10.60–$10.70; FCF $5.2–$5.6B. Honeywell+2Honeywell International Inc.+2

Segment color (Q3): Aerospace up ~15% (commercial aftermarket strength); Industrial Automation softer; Building Automation modest growth. Reuters

Valuation

At ~$215, HON trades at ~20.2× FY’25 adj. EPS midpoint (~$10.65). Market cap is ~$136–$137B; FCF yield ~4% on the mid-guide. (P/E and yield computed from company guide and current price/market cap.) Honeywell International Inc.+1

Balance sheet / share count context

Q3 filings show ~635M basic shares outstanding; cash ~$12.9B at Sep 30. Weighted average diluted shares ~639M in Q3. Stock Titan+1

New business, contracts & partnerships (illustrative 2025 items)

DoD quantum-sensing navigation awards under the TQS program (CRUISE & QUEST). aerospace.honeywell.com+1
LOT Polish Airlines selected Honeywell avionics for 13 Boeing 737 MAX (service from 2026). aerospace.honeywell.com
NXP partnership expanding AI/autonomy compute for Anthem avionics and future autonomous flight stacks. Reuters
Ongoing NASA collaborations (Space Act agreements/CLEEN-II testing) underscore aero/space credibility. NASA+1

Strategic portfolio moves

Honeywell is executing a three-company plan (Solstice now; Aerospace/Automation by 2H26), a path influenced by activist engagement. The company also continues selective M&A (e.g., UK catalyst tech unit from Johnson Matthey). Reuters+2Investopedia+2

Key watch items (next 3–6 months)

Oct 30, 2025: Solstice distribution/listing (SOLS). Track “when-issued”/regular-way trading dynamics and index implications. Honeywell
Post-spin guide updates: any revisions to Honeywell’s 2025–26 outlook ex-Solstice. Honeywell International Inc.
Quantinuum milestones: funding, roadmap (100 logical-qubit target by 2027) and any formal IPO steps. quantinuum.com+1

Risks

Aerospace cycle or aftermarket cooling; Automation growth/margin pressure; execution risk around multi-step separations; macro/FX; and timing/valuation risk around any Quantinuum transaction. Reuters

Bottom line

Near-term: Solstice spin is concrete and imminent; HON has demonstrated core earnings resilience even after adjusting for the carve-out. Honeywell+1
Medium-term: Two-way upside—operational focus from the 2026 Aerospace/Automation split and optionality from a potential Quantinuum listing in 2026–27. Reuters+1

Here’s a sum-of-the-parts table and valuation snapshot comparing Honeywell pre-spin, post-spin (core), and Solstice Advanced Materials (SOLS), including basic metrics and rationale:

🧮 Sum-of-the-Parts View (as of October 27 2025)

Segment / Company	FY 2025E Sales ($ B)	FY 2025E Adj EBIT Margin	FY 2025E EPS / EBIT ($ B)	EV/EBIT × Assumption	Implied EV ($ B)	Comments
Honeywell (core post-Solstice)	38.0 – 39.0	22 %	8.4 – 8.6	16×	135 – 138	Aerospace & Automation focus; strong backlog; mid-cycle margins
Solstice Advanced Materials (SOLS)	2.8 – 3.0	17 %	0.5 – 0.55	12×	6 – 7	Specialty materials, refrigerants, semiconductor cooling, sustainable chem
Quantinuum (Honeywell stake ~ 54 %)	—	—	—	10× revenue (est. ~ $1 B valuation slice)	10 – 12	Private; ~$10 B enterprise value per late-2025 round
Net cash & other adj.	—	—	—	—	+3	Pro forma net cash after spin-prep debt issues

→ Sum-of-Parts EV ≈ $154–160 B
At a current equity market cap of ~$137 B, the implied upside range is +12–17 % if the market re-rates Honeywell and Solstice in line with peers post-spin.

🧭 “What You Get” per 100 Honeywell shares (post-distribution)

Component	Share ratio	Implied value*	Notes
Honeywell (core)	100 shares retained	~$21,500	Ongoing Aerospace + Automation focus
Solstice (SOLS)	25 shares received (1 : 4 ratio)	~$1,200 – 1,400	Independent Nasdaq listing Oct 30
Total package value	—	~$22,700 – $23,000	Equivalent to ~ 10–13 % uplift if Solstice holds fair value range

*Assumes HON $215, SOLS initial $45–55.

🧩 How this Reshapes Honeywell

Category	Pre-Spin	Post-Spin
Business Mix	45 % Aerospace, 25 % Automation, 20 % Materials, 10 % Others	~55 % Aerospace, 40 % Automation, 5 % Other
Revenue Diversification	Broader industrial footprint	Narrower, higher-margin cyclicals
EPS Mix	Includes volatile materials cycle	More stable defense/aerospace + automation
Capital Allocation	Mixed	Sharper focus; potential buybacks or Quantinuum growth funding

🧠 Key Takeaways

Solstice listing (Oct 30) is immediate, clean, and tax-free, unlocking ~$6–7 B in stand-alone equity value.
Honeywell core remains a diversified industrial tech play at ~20× FY 2025 EPS with above-peer margin resilience.
Quantinuum remains a powerful hidden call option—IPO talk for 2026-27 with valuations rising toward $10 B+.
Sum-of-parts math suggests current price undervalues the combined pieces by ~12–17 %.
Dividend: 2.0–2.2 % yield post-spin; expected continuity of Honeywell’s dividend track record.

Disclosure: Obviously, we are long Honeywell (HON) HON) main business segments and their recent contribution to revenue and profit, based on the latest available public disclosures:

🚀 Main Segments & Approximate Sizes

Honeywell reports four primary segments (prior to the full spin-off of its Advanced Materials unit). The segments and their approximate revenue/margin profiles are:

Segment	Description	Latest Info
Aerospace Technologies	Commercial aftermarket & OEM avionics, business/general aviation, defense & space	In 2024, this segment generated approx. $15 billion in revenue (about 40 % of the company) per news commentary. Financial Times+2Reuters+2
Automation (Industrial Automation / Building Automation / Productivity & Workflow Solutions)	Factory/plant automation, warehouse & workflow, sensing & safety, building products/solutions	According to commentary, the “automation business” was ~$18 billion in annual revenue. Financial Times+1
Advanced Materials (to be spun-off as Solstice)	Specialty chemicals/materials, refrigerants, semiconductor cooling, protective fibers etc.	2024 commentary suggested approx. $4 billion in revenue for this unit. Financial Times
Energy & Sustainability Solutions (ESS) / Other segments	Includes UOP (refining catalysts & equipment), building solutions, energy systems	The 4Q 2024 results show growth of ~1% organically in this segment. Honeywell International Inc.+1

📊 More Detailed Figures & Trends

In Q3 2025, Honeywell reported total sales of $10.4 billion (+7 % y/y) and orders up 22 %. Investors+1
For Q2 2025, segment profit was ~$2.4 billion and sales grew ~8 % y/y. Honeywell International Inc.+1
From the 2024 Annual Report and related materials: sales increased ~5% for full-year 2024. Honeywell International Inc.+1

✅ What this means

The Aerospace segment is clearly the largest individual unit, with ~40% of total revenue.
Automation is broadly defined but also a major contributor (~35-45% range depending on how sub-segments are aggregated).
The Advanced Materials (Solstice) segment (to be spun off) is smaller in scale yet strategically meaningful.
Margins and profit contribution vary significantly: Aerospace tends to command higher aftermarket/defense margins; Automation is more cyclical and exposed to industrial demand; Materials is more commodity and cycle-sensitive.

📊 Q3 2025 Segment Results (three‐months ended Sept 30)

From Honeywell’s 10-Q and earnings release: Stock Titan+2Honeywell+2

Segment	Net Sales (USD M)	Growth y/y	Notes
Aerospace Technologies	4,511	+12% organic Honeywell International Inc.+1	Strong aftermarket & defense.
Industrial Automation	2,274	Flat to +1% organic Honeywell+1	Some softness.
Building Automation	1,878	Up (from ~1,745M prior) Stock Titan	Moderate growth.
Energy & Sustainability Solutions (ESS)	1,742	Up from ~1,563M prior year Stock Titan	Smaller mix.
Total Net Sales	10,408	+7% (reported) Honeywell International Inc.+1

Margin / Profitability indicators

Aerospace segment margin in Q3: ~26.1% (down 1.6 pts year over year) Honeywell
Industrial Automation margin: ~18.8% (down ~1.5 pts y/y) Honeywell
Full-year (guide) overall segment margin expected ~22.9%–23.0% (up ~0.3-0.4 pts) Honeywell
Operating cash flow for first nine months: $5,204 M vs $3,816 M prior year. Stock Titan
Cash & equivalents at Sep 30: $12,930 M. Stock Titan

✅ Key Takeaways

The Aerospace segment is currently the strongest performer in growth and margin.
Industrial Automation, though large, is under pressure: very weak growth + margin decline. That is a risk area.
Building Automation & ESS are middling but play supportive roles in Honeywell’s portfolio.
The high cash flow and strong balance sheet (over $12.9 B cash) give Honeywell flexibility for portfolio actions (spin-offs, M&A, dividends).

Monday, October 27, 2025

Here’s a concise, investor-ready readout on Honeywell (HON), with the Solstice spin-off front and center and context on Quantinuum.