Honeywell announced board approval for the spinoff of its aerospace segment, a move that would create two separately traded public companies from one of the largest industrial conglomerates. With FY revenue of $37.4B (+7.8% YoY) and $7.36 diluted EPS, the aerospace unit — historically the highest-margin and fastest-growing segment — has long been seen as undervalued inside the broader HON structure. Conglomerate discount compression is the core thesis: pure-play aerospace peers typically command meaningfully higher multiples than diversified industrials.

The key questions now are valuation of each entity at separation, the tax structure and timeline, and whether the remaining industrial stub will carry sufficient scale to trade at a healthy multiple. Investors should watch for the Form 10 filing with the SEC, any leverage allocation between the two entities, and comparable pure-play aerospace multiples (GE Aerospace, TransDigm) as a read-through on where SpinCo could price.