Honeywell International Inc. (HON): A Bull Case Theory

Core Thesis - Honeywell International Inc. is undergoing a strategic review of its Productivity Solutions & Services (PSS) and Warehouse & Workflow Solutions (WWS) businesses, exploring potential sales while maintaining its spin timelines, which could unlock significant value for investors [2][3][4] Financial Overview - As of October 14th, Honeywell's share price was $208.61, with a market capitalization of approximately $136 billion and an enterprise value around $160 billion [2] - The company has a trailing P/E of 24.01 and a forward P/E of 18.35, along with an EV/EBITDA of roughly 14× and a dividend yield of 2.2% [2] Strategic Options - Potential strategic options include selling automation sub-units to industrial software peers, spinning off logistics technology assets, or using proceeds from divestitures for share buybacks or debt reduction [3] - Successful transactions from these options are expected to enhance margins and potentially deliver 10–15% equity appreciation [3] Portfolio Rationalization - By rationalizing its portfolio, Honeywell could sharpen its focus on higher-margin, growth-oriented segments while providing flexibility to return capital to shareholders or strengthen the balance sheet [4] - The combination of potential divestitures, balance sheet optimization, and a clear strategic focus positions Honeywell to capture value from both existing operations and future portfolio actions [4] Investor Sentiment - The strategic review is viewed as an inflection point for investors, with multiple levers available to enhance shareholder returns while maintaining long-term operational resilience [4]