By Aatreyee Dasgupta
June 29 (Reuters) - Honeywell Aerospace shares rose 7% in their Nasdaq debut on Monday, marking another step in the three-way split of manufacturing giant Honeywell.
Shares of the aircraft engine, parts and defense systems maker opened at $236.78 apiece, versus $221.01 at the close of last week in "when-issued" trading, which began earlier this month.
In 2025, Honeywell said it would separate into three standalone companies focused on automation, aerospace and advanced materials,
a process expected to conclude this year.
With the listing, Honeywell Aerospace follows peer GE Aerospace in conglomerate breakups, aimed at improving performance through more streamlined, specialized operations.
"Under legacy Honeywell reporting, HONA significantly underperformed its peers in aftermarket growth, largely due to execution and supply chain challenges," RBC analyst Ken Herbert said in a research note on Friday.
"We believe better execution, and increased focus on RMUs (Retrofit, Migration and Upgrade Programs), will support HONA's improved AM right to price."
Honeywell Aerospace makes engines, electronics and systems used in aircraft and spacecraft for customers, including planemakers Boeing and Airbus, as well as for airlines and the U.S. military.
Its debut comes amid strong investor appetite for aerospace and defense assets, driven by pent-up demand and rising military spending.
In March, U.S. President Donald Trump met with munitions makers including Honeywell Aerospace, as his administration pushes to expand weapons production after military operations in Iran and other conflicts drew down U.S. stockpiles.
The company will make a $500 million investment as part of an agreement made the same month with the Pentagon, joining RTX and Lockheed Martin to increase precision-guided missiles and munitions production.
Earlier this month, Honeywell Aerospace told investors that it expects to book $6.5 billion in adjusted earnings by 2030, driven by strong demand from defense customers and jetmakers.
It expects sales growth of 7% to 9% this year and free cash flow of $1 billion to $1.5 billion.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Joyjeet Das)
