Honeywell Shares Rise After Elliott Investment

Honeywell International Inc. observed a 7% increase in its share prices during early Tuesday trading, following a report from Bloomberg stating that Elliott Investment Management has acquired a stake of over $5 billion in the company.

This investment represents Elliott's largest commitment to a single stock, making it one of Honeywell's top five shareholders, according to Bloomberg.

Elliott is reportedly pushing the industrial giant to explore a structural breakup, akin to strategies pursued by other major conglomerates like General Electric (NYSE:GE).

Bloomberg highlighted Honeywell's comparatively modest growth in recent years, with stock prices rising about 25% over the past five years, which falls short of the 76% gain seen in the S&P 500 Industrials Sector index.

Despite Honeywell's historic valuation premium, its performance has stagnated compared to its competitors.

Elliott's push for a breakup aligns with Honeywell's announcement to spin off its advanced materials division, aiming to enhance operational efficiency.

Honeywell operates across various sectors, including aerospace, energy, and industrial automation, but inconsistent performance in these areas has drawn investor scrutiny.

Bloomberg also noted past efforts by activist investors, such as Dan Loeb's Third Point LLC, to encourage Honeywell to divest specific divisions like aerospace.

Former CEO Darius Adamczyk decided to spin off Honeywell's thermostat division, Resideo Technologies (NYSE:REZI), and its turbocharger business, Garrett Motion (NASDAQ:GTX).

Elliott's recent campaigns have targeted larger firms, with its previous stakes in AT&T (NYSE:T) and SoftBank (TYO:9984) being smaller compared to Honeywell's position.