According to a Wall Street Journal report, Honeywell International Inc. is considering spinning off its advanced materials division, sparking investor interest and boosting the company's stock.

Honeywell's Strategic Changes

The advanced materials division serves a variety of industries including retail, pharmaceuticals, construction, and manufacturing. If spun off, the division could be worth more than $10 billion as a separately traded public company. Last year, the division recorded sales of $3.65 billion, significantly contributing to Honeywell’s diverse portfolio, which includes aerospace components and building automation technology.

Market Reaction to Spin-Off News

Despite the positive response to the potential spin-off, Honeywell’s stock has shown mixed results in recent periods. The company's year-to-date return is -1.46%, underperforming the S&P 500’s 19.42% gain. However, Honeywell posted a 1-year return of 12.57% and a 5-year return of 37.81%, though both figures trail the broader market.

Honeywell Stock Performance

The company’s market capitalization stands at $132.098 billion, with a price-to-earnings ratio of 23.19 and earnings per share of $8.76. Analysts have set an average one-year price target of $226.33 for the stock, suggesting potential upside from current levels. The company is scheduled to report its next earnings in October 2024, which may provide further clarity on the spin-off and its impact on Honeywell’s future strategy.

The proposed spin-off of the advanced materials division may be part of Honeywell's broader efforts to optimize its portfolio and focus on high-growth areas.