Honeywell looks like GE 2.0, worth about $265 billion in parts against a $135 billion market cap, with its aerospace spinoff coming in June. The core business is worth about $156 billion at 6.5x its $24 billion of revenue, aerospace about $98 billion at 7x $14 billion, and its 55% Quantinuum stake about $11 billion if Quantinuum is worth around $20 billion. x.com  x.com  x.com 

Honeywell Aerospace starts life with heavy spin-off burdens, so it is worth waiting for a better price. It carries $15.85 billion of debt and $800 million of annual interest after sending $15.1 billion to Honeywell, pays $1.125 billion over five years to use the Honeywell name, faces standalone overhead and took on the $375 million Flexjet settlement. After a guidance cut, institutions may shun it through year-end and underwater holders may sell for tax losses. It should still do well long term. … Show more

Honeywell's breakup should unlock value, because its ~17x blended EV/EBITDA is a conglomerate multiple on aerospace and automation businesses that deserve different valuations. Aerospace spins out with a 27% EBITDA margin, second only to TransDigm among peers, while automation is dragged down by the conglomerate wrapper. At peer-median multiples the parts are worth about $307 a share, roughly 39% above $221.50, with a $187 bear case and $439+ bull case. The June 3 aerospace investor day is key. … Show more

Honeywell Aerospace has always been a weak business, with a worse mix than better aerospace names such as HEI, TransDigm, Howmet and GE. With so many good aerospace businesses available, there is little reason to own it. @pitandhummus agrees that, underwritten standalone after the spin-off, it looked overstated relative to much better businesses like GE. x.com  x.com 

Parker-Hannifin is the better aerospace holding than Honeywell Aerospace: time-tested Parker kept delivering while the newly spun-off Honeywell Aerospace reported a disastrous quarter. Honeywell Aerospace is not a GE-style spin-off, and the weakness is company-specific: most aerospace stocks are working, with GE among the S&P 500's top five performers and Honeywell Aerospace in the bottom five. As a new name in tax-loss season, it likely stays under pressure even if it bounces to the $170s. … Show more

Honeywell's Quantinuum stake is very underpriced when weaker quantum names like Rigetti and Quantum Computing are bid up to multi-billion valuations. Quantinuum is the best asset in quantum and just raised at $10bn from Nvidia, yet Honeywell trades at 18 times earnings, with Elliott as activist and leverage to robotics over two to three years. Standalone quantum valuations may be wrong, but Honeywell has scarcity value as one of few institutionally investable quantum names besides IBM. x.com  … Show more

Boeing, alongside GE, is preferred over the Honeywell Aerospace spin-off because it has more credibility in aerospace. Honeywell Aerospace reiterated guidance two months ago, then missed and cut its organic growth outlook by half, and its management needs time to mature. x.com 

Howmet Aerospace is an obvious short because its valuation is insane for a cyclical industrial. Its oligopoly in turbine blades, where only three companies can produce at scale, is already well known and priced in at about 100x free cash flow. Even a bull case implies only a 2.7% free cash flow yield on 2030 numbers, far less attractive than Microsoft, Meta, Nvidia or Salesforce. x.com  x.com 

HEICO is a rare compounder because owner-managers with a decentralized culture keep growing niche, FAA-approved aerospace parts. The Mendelson family owns about 20%, and the stock has compounded about 22% a year since 1990. Q2 revenue rose 25% to $1.38B and EPS 49% to $1.66, both beating estimates. Planes fly 30+ years and need parts throughout, in an aerospace market projected to grow from $330B in 2023 to $662B by 2033. The stock is always expensive; low $40s would be a lucky entry. x.com  … Show more

Solstice Advanced Materials is a nice AI pick, and the market has been rewarding spun-off businesses since GE split into GE, GE HealthCare and GE Vernova. x.com