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Honeywell to Delist from Chicago to Shun Dual Listing Trade

Zacks Equity Research

Diversified conglomerate Honeywell International Inc. (HON) recently debriefed investors about its plan to delist the common stock from the Chicago Stock Exchange to avoid dual listings. The stock, however, will continue to trade on the New York Stock Exchange.

The purported move is aimed to streamline operations and eliminate unnecessary duplicative administrative procedures and costs involved with them. The voluntary withdrawal of the shares from the Chicago Stock Exchange is expected to take place within a month. However, the Chicago Stock Exchange will continue to trade Honeywell shares on an unlisted trading privilege basis, thereby not affecting the liquidity of the stock.

The company is also realigning its business segments to rationalize its operations. Effective third-quarter 2014, Honeywell will report the results of its Transportation Systems segment together with the Aerospace segment to capitalize on their engineering and technological similarities. Overall, Honeywell will report its financial performance under three business segments: Aerospace, Automation and Control Solutions, and Performance Materials and Technologies.

The recent sale of the Friction Materials business was also a testament of its corporate strategy to align the portfolio in favor of core businesses. Moving forward, Honeywell remains positive on the macroeconomic environment and expects organic sales growth acceleration throughout the year.

At the same time, Honeywell intends to continue investing in new products and technologies, and increase its footprint in high-growth markets. The restructuring and cost streamlining initiatives should translate into continued margin expansion in the second half of the year.

Honeywell currently holds a Zacks Rank #3 (Hold). Other better-ranked stocks in the industry include Federal Signal Corp. (FSS), ITT Corp. (ITT) and Macquarie Infrastructure Co. LLC (MIC), each carrying a Zacks Rank #2 (Buy).

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