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)
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Record date: Oct 17, 2025.
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Distribution: expected 12:01 a.m. ET, Oct 30, 2025.
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Ratio: 1 Solstice share for every 4 Honeywell shares.
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Listing: Nasdaq, ticker SOLS, from Oct 30, 2025.
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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)
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Q3 sales: $10.4B (+7% y/y); Adj. EPS $2.82; orders +22%; backlog at a high.
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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)
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DoD quantum-sensing navigation awards under the TQS program (CRUISE & QUEST). aerospace.honeywell.com+1
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LOT Polish Airlines selected Honeywell avionics for 13 Boeing 737 MAX (service from 2026). aerospace.honeywell.com
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NXP partnership expanding AI/autonomy compute for Anthem avionics and future autonomous flight stacks. Reuters
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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)
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Oct 30, 2025: Solstice distribution/listing (SOLS). Track “when-issued”/regular-way trading dynamics and index implications. Honeywell
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Post-spin guide updates: any revisions to Honeywell’s 2025–26 outlook ex-Solstice. Honeywell International Inc.
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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
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Near-term: Solstice spin is concrete and imminent; HON has demonstrated core earnings resilience even after adjusting for the carve-out. Honeywell+1
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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
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Solstice listing (Oct 30) is immediate, clean, and tax-free, unlocking ~$6–7 B in stand-alone equity value.
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Honeywell core remains a diversified industrial tech play at ~20× FY 2025 EPS with above-peer margin resilience.
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Quantinuum remains a powerful hidden call option—IPO talk for 2026-27 with valuations rising toward $10 B+.
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Sum-of-parts math suggests current price undervalues the combined pieces by ~12–17 %.
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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
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In Q3 2025, Honeywell reported total sales of $10.4 billion (+7 % y/y) and orders up 22 %. Investors+1
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For Q2 2025, segment profit was ~$2.4 billion and sales grew ~8 % y/y. Honeywell International Inc.+1
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From the 2024 Annual Report and related materials: sales increased ~5% for full-year 2024. Honeywell International Inc.+1
✅ What this means
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The Aerospace segment is clearly the largest individual unit, with ~40% of total revenue.
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Automation is broadly defined but also a major contributor (~35-45% range depending on how sub-segments are aggregated).
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The Advanced Materials (Solstice) segment (to be spun off) is smaller in scale yet strategically meaningful.
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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
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Aerospace segment margin in Q3: ~26.1% (down 1.6 pts year over year) Honeywell
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Industrial Automation margin: ~18.8% (down ~1.5 pts y/y) Honeywell
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Full-year (guide) overall segment margin expected ~22.9%–23.0% (up ~0.3-0.4 pts) Honeywell
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Operating cash flow for first nine months: $5,204 M vs $3,816 M prior year. Stock Titan
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Cash & equivalents at Sep 30: $12,930 M. Stock Titan
✅ Key Takeaways
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The Aerospace segment is currently the strongest performer in growth and margin.
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Industrial Automation, though large, is under pressure: very weak growth + margin decline. That is a risk area.
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Building Automation & ESS are middling but play supportive roles in Honeywell’s portfolio.
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The high cash flow and strong balance sheet (over $12.9 B cash) give Honeywell flexibility for portfolio actions (spin-offs, M&A, dividends).
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