Morningstar | Honeywell Completes Spin-Offs on Deck. See Updated Analyst Note from 29 Oct 2018
Wide-moat rated Honeywell completed the second of its spin-offs on Oct. 29, 2018, with the separation of Resideo Technologies, formerly its Homes and ADI Global Distribution Business. For the year ended on Dec. 31, 2016, Resideo reported net profit of $177 million on $4.6 billion of net sales. Investors will recall that Honeywell completed the spin-off of Garrett Technologies back in September. We think of Garrett as a moaty business that shares many similar attributes like switching costs and intangible assets to narrow-moat rated BorgWarner within our coverage. After reevaluating our valuation to account for the spin-offs, we are lowering our fair value estimate to $150 from $168 previously.We continue to view the firm as one of the highest quality, well-run firms in our industrial coverage. We also like the spin-off of Resideo given that we saw this portion of the business as one that was more commoditized relative to the remaining portions, which we see as differentiated thanks to switching costs and intangible assets (underpinned by our narrow moat rating for the remaining segment). The Homes business lacked some of the connected technology offerings that were most valued on the commercial side of the business, which, among other things, measure energy consumption and help provide more effective security, for example. Overall, our fundamental outlook for the remaining portions of Honeywell's business remains unchanged.
Honeywell International is a technology and manufacturing company. The company has four segments: Aerospace, which supplies products, software and services for aircrafts; Honeywell Building Technologies, which provides products, software, solutions and technologies including building control and optimization, energy management, access control, video surveillance, fire products, and remote patient monitoring systems; Performance Materials and Technologies, which develops and manufactures chemicals and materials, process technologies and automation solutions; and Safety and Productivity Solutions, which provides products and software that improve productivity, workplace safety and asset performance.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.