Jim Cramer says investors betting against Honeywell have it all flawed. Here’s why

CNBC’s Jim Cramer on Tuesday cheered Honeywell International‘s (HON) steerage affirmation, which got here alongside an announcement that the commercial conglomerate could be restructuring its enterprise.  

While some market individuals really feel Honeywell’s new CEO Vimal Kupar is “going to make a giant transfer someplace,” Cramer mentioned on Tuesday “crucial factor I heard was they’ll be inside or above expectations” for third-quarter earnings per share. Honeywell is about to report earnings earlier than the opening bell on Oct. 26.

“This is a closely shorted inventory of late. People really feel it’s misplaced its manner,” Cramer mentioned on “Squawk on the Street.” “I do not know why folks really feel that manner. You’ve acquired a brand new CEO, and he will take motion.” Honeywell’s inventory has declined roughly 13% yr thus far, underperforming the overall S&P 500 and the industrials sector. On Tuesday, the inventory fell modestly.

In a press launch, Honeywell mentioned it is realigning its enterprise towards three “compelling megatrends”: automation, the way forward for aviation, and vitality transition. Beginning within the first quarter of 2024, Honeywell will report outcomes for 4 new working segments.

Honeywell’s aviation unit is the corporate’s crown jewel, Cramer mentioned, whereas additionally saying the restructuring introduced Tuesday is “actually type of [Kupar’s] step certainly one of what he intends to do.”

Kupar took over Honeywell’s high job in June from Darius Adamczyk, who had led the corporate since 2017. Cramer’s Charitable Trust, the portfolio utilized by the CNBC Investing Club, owns Honeywell shares. Within the S&P 500 industrials sector, Cramer’s Trust additionally owns Emerson Electric (EMR) and Caterpillar (CAT).