Honeywell’s spin-off into three separate public businesses from its massive industrial giant is complete.
Investors are just beginning the hard part, Jim Cramer says.
The CNBC host sees Honeywell Technologies (HON) and new independent Honeywell Aerospace (HONA) as an interesting long-term setup, comparing the split to General Electric’s multiyear breakdown. He says such targeted companies can eventually get greater valuations than the conglomerate they were part of, but it may take the market a few quarters to see that value.
Honeywell Aerospace began trading separately on June 29. The other automation firm became Honeywell Technologies and kept the HON ticker. The advanced-materials operation was spun off as Solstice Advanced Materials (SOLS) in October 2025.
Stockholders as of June 15 got one share of Honeywell Aerospace for every two shares of Honeywell they owned. Honeywell International unit Honeywell Technologies then completed a 1-for-2 reverse stock split, reducing total outstanding shares to 317 million.
This results in two distinct investment scenarios where there was formerly a single sophisticated company.
Honeywell Technologies offers exposure to building, industrial and process automation. Honeywell Aerospace provides a more direct bet on commercial aviation, business jets, defense and space.
Cramer’s theory is that investors should look at each business on its own for growth, profitability and cash flow rather than expecting the sum-of-the-parts value to come through right away.
“Each company is built around a distinct strategy with greater focus and financial flexibility to pursue a long-term growth agenda,” Honeywell Technologies CEO Vimal Kapur said when the separation was completed.
Honeywell Technologies gives investors the first post-split proof
Honeywell Technologies has already provided its first earnings update as a specialized automation company.
Sales in the second quarter were $5.2 billion, up 3% on a reported basis and up 4% organically, excluding the former aerospace business. Orders increased 16%, creating a backlog of over $20 billion.
That order growth is particularly important since it implies customers are not delaying projects while Honeywell reorganizes.
Related: Morgan Stanley drops timely Honeywell stock opinion
Organic revenues in Building Automation grew 9% on demand from data centers, health care and hospitality projects. Industrial Automation sales increased 4% and orders rose 10%. Process Automation and Technology revenues fell 1%, but orders rose 24%, which might indicate a turnaround later in the year.
Management lifted its full-year expectations for sales to $19.8 billion to $20 billion and adjusted earnings to $8.05 to $8.35 a share. Honeywell Technologies aims to generate around $2 billion in free cash.
Those numbers are helping the bullish case: the automation company is beginning on its own with expanding orders, a hefty backlog, and rising expectations.
What Honeywell investors should watch
- Whether Honeywell Technologies converts its $20 billion backlog into profitable sales.
- Whether process-automation orders produce stronger second-half growth.
- How quickly standalone and separation costs decline.
- Honeywell Aerospace’s first independent earnings report.
- Whether each company attracts a more specialized shareholder base.
The danger was that the second-quarter report would still be full with accounting noise from the split. Honeywell Aerospace was included in consolidated results because the spin was one day before the quarter ended, and a big deconsolidation gain affected generally accepted accounting principles earnings.
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That complexity argues for Cramer’s request to be patient. It may take a few clean, stand-alone quarters for investors to feel comfortable applying an automation-centric valuation to Honeywell Technologies.
Honeywell Aerospace could be the breakup’s overlooked piece
Cramer is particularly a fan of Honeywell Aerospace because investors tend to pay a premium for sharply focused aviation and defense companies.
The company provides another avenue to meet demand in the aerospace sector without being fully reliant on an aircraft manufacturer such as Boeing (BA).
Honeywell Aerospace had 2025 sales of $17.4 billion, adjusted earnings before interest and taxes of $4.3 billion and a backlog of roughly $18 billion at year-end. It has more than 36,000 employees and serves more than 10,000 customers.
Its systems are deployed on around 90% of airplanes now in operation and are designed into more than 250 platforms under production, according to the company’s regulatory filing.
That established base can provide a continuing need for replacement parts, repairs, upgrades, and aftermarket services long after an aircraft enters service.
Honeywell Aerospace also sees adjusted earnings before interest and taxes climbing from $4.3 billion in 2025 to nearly $6.5 billion by 2030, or about 9% compound annual growth. The projection is management’s goal, not a promise of what will happen.
Honeywell’s breakup faces its next major stock test
Honeywell Aerospace will announce its first quarterly earnings as a standalone company Aug. 5. The update should give investors more clarity on its margins, cash flows and standalone costs.
In the bullish scenario, both businesses gain clearer identities and value multiples closer to those of specialized counterparts. In this scenario, investors might view Honeywell Technologies as an automation corporation, while they see Honeywell Aerospace as focused on aviation production, aftermarket demand, and defense spending.
The bear case is that corporate costs are duplicated, separation fees are paid, and quarterly results are bumpy, delaying the anticipated value generation.
Breaking up does not always mean greater business. It reduces organizational complexity but requires each management team to demonstrate that greater focus can lead to faster growth and higher profits.
That is why Cramer’s General Electric comparison matters.
The potential return is probably in keeping the various companies through the awkward period when the financial statements are difficult to read, and investors are still determining what each company is worth.
Honeywell’s breakup has created the parts.
Related: Honeywell approves aerospace spinoff to launch 2 public companies
