ClearBridge Value Strategy on Honeywell Aerospace
Thesis
ClearBridge initiated a position in Honeywell Aerospace following its separation from Honeywell in late June. The managers believe the subsequent share-price decline reflected technical selling rather than meaningful deterioration in the underlying business. They expect organic growth to accelerate as supply-chain execution improves. The investment provides exposure to a newly independent aerospace business with potential for operational improvements to drive valuation recovery.
“We expect organic growth to reaccelerate as supply chain execution improves, and we believe its post-spin decline reflected technical selling pressure more than fundamental impairment.”
Key risks
- Persistent supply-chain difficulties could delay growth acceleration.
- Post-spin selling pressure could continue to affect shares.
- Operational improvements may take longer than anticipated.