We're raising our Honeywell Technologies price target, reflecting post-spinoff optimism

Here is a story making headlines in the economy: Honeywell Technologies shares rallied Thursday, bucking a broader market selloff after the industrial automation company delivered a strong quarter and raised guidance. Revenue in the second quarter ended June 30 rose 4. 3% year over year to $9.

72 billion, exceeding the LSEG-compiled consensus estimate of $9. Honeywell Technologies (HON) numbers still include results from Honeywell Aerospace (HONA), which was spun off into a separate publicly traded company at the end of the quarter. Excluding HONA, which missed on revenue, the HON top line looks ever better.

Economic Details

Adjusted earnings per share (EPS) fell 4. 2% from the year-ago period to $4. 52, below the LSEG estimate of $4.

Excluding HONA, which was a drag on profits, the HON bottom line also looks a lot better. That's why the Street is looking past the miss, instead taking it out on HONA shares. HON YTD mountain Honeywell Technologies (HON) YTD Bottom line This was a strong quarter for Honeywell Technologies and its final quarter including the results of the now spun-off aerospace division.

Wall Street rewarded HON, sending the Club stock more than 5% on the print. The quarter is a perfect example of the type of stock we want in this market, as outlined in Jim Cramer's latest column. Honeywell Technologies, as its name implies, is tech-related, an important factor for longer-term growth.

Analyst Views

But it can trade outside of the up-and-downs of artificial intelligence headlines and benefit from broader economic strength. Honeywell Technologies creates hardware and software that automate the complex operations in buildings, factories, and supply chains. While focusing most of our analysis on the remaining HON businesses, the misses on Honeywell Aerospace sales and segment profits were why HONA shares dropped about 6% on Thursday.

We never like to see results below estimates. But in the case of HONA, we are sticking with the position as we continue to think that supply chain improvements will result in margin expansion and EPS growth. Honeywell Aerospace is set to release earnings on Aug.

Since we got a preview in the HON report of what's to come from HONA, that conference will be even more important than usual for investors like us to get the lay of the land going forward. Why we own it Honeywell Technologies (HON) creates hardware and software that automate the complex operations in buildings, factories, and supply chains. It completed the catalyst we had been waiting for — the spin-off of Honeywell Aerospace (HONA) into a separate publicly traded company.

Economists are analysing what the news means for the markets.