Honeywell’s Garrett Motion’s Growth Driver Highlights



Garrett Motion addresses investors

On September 6, Garrett Motion, Honeywell’s (HON) proposed spin-off of its Transportation Systems business, held an investor conference in New York City. Olivier Rabiller, Garrett Motion’s president and CEO, addressed the investors and provided the business update.

Honeywell has announced the key dates of the spin-off dividend of Garrett Motion stock. For more details, please refer to Honeywell Announces Spin-Off Dividend of Garrett Stock

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Garrett Motion expects to start regular trading October 1 on the NYSE under the symbol “GTX.” In 2017, Garrett Motion posted revenues of $3.1 billion and EBITDA of $623.0 million. By geography, Europe accounts for 52.0% of its revenues. Asia follows with 30.0%, the United States comprises 10.0%, and other countries constitute 8.0%.

Rabiller noted, “I am excited to update the investment community on the strong position Garrett will have in the automotive industry following our planned spin-off from Honeywell at the end of this quarter.”

Stock price movement

Honeywell gained ~2.4% and closed at $162.81 for the week ended September 7. As a result, the stock traded 7.9% above its 100-day moving average price of $150.87, which indicates an upward trend for the stock. Honeywell outperformed the Invesco Aerospace & Defense ETF (PPA), which rose ~0.8%%. PPA invests 7.2% of its portfolio in Honeywell.

On a year-to-date basis, Honeywell has continued its upward surge with a gain of ~6.2%. United Technologies (UTX), Textron (TXT), and Boeing (BA) have risen 3.0%, 22.2%, and 18.4%, respectively.

So far, Honeywell has underperformed its peers in 2018. Analysts are bullish on the stock and have recommended a target price of $176.40. This implies a return potential of 8.3% over its closing price on September 7.

Currently, Honeywell has a 14-day RSI (relative strength index) of 67, which indicates that the stock is very close to being overbought. An RSI of 70 and above shows that a stock has temporarily moved into the “overbought” position, while an RSI of 30 and below indicates that a stock has temporarily moved into the “oversold” position.


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