Honeywell announcement suggests faster break-up timeline, says Citi

Citi views Honeywell’s (HON) decision to continue to explore strategic portfolio actions as inline with CEO Vimal Kapur’s ongoing portfolio simplification and realignment initiatives and likely accelerating the company’s value creation over time. The firm thinks “pure-play” aerospace and automation focused companies could garner a better valuation multiple over time as they establish themselves. While yesterday’s announcement doesn’t necessarily indicate Honeywell will separate its businesses, the news suggests a faster timeline for a potential break-up than anticipated, the analyst tells investors in a research note. Citi continues to think a more streamlined portfolio and focused management could unlock incremental value over time.