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New position in $HONAV - the when-issued stub for $HONA ahead of the June 29 separation.
At 320M DSO at ~$250 this is a $80B cap stock, +$15B net debt = $95B EV. 2025 EBIT $4.3B, guiding to 6-8% rev CAGR to 2030 and "faster" EBIT growth. At 10% (way too sandbagged) you are looking at $7B EBIT by 2030 putting this at mid-teens EV/EBIT on 1-2FY basis.
How did other Aero spins do? $HWM is up 18x from 2016, $GE is up 165% since $GEV spin 2024 and 585% since $GEHC spin 2023. $GE trades 35x 2027 EV/EBIT, $HWM 34x. $HONA over-indexes to avionics and auxiliary power in engines - and perhaps less-attractive sub-commercial - but I don't think it deserves a 50%+ haircut.
And of course, these big conglomerate unlocks always open massive synergies and streamlining and I think Aero has been a key proof point of this with Howmet and GE Aviation. This has become a largely non-cyclical catch-up supply-capped business. And there will be some defense tailwinds as well in the aftermath of US-Iran.
Not sure how this trades out the gate but I suspect people are not stupid and are well-versed in GE and Howmet and Rolls-Royce and other Aero monsters in recent years. You get another bite at the apple here. I suspect $HONA should meaningfully outperform $HON remain-co, but the real prize is a potentially 2x+ re-rate on top of an earnings figure that can grow well above LDD once the Aero-focused managers are free to grow and allocate capital away from the captive conglomerate shell.
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