Berenberg announced on Tuesday that it had raised its price target for Honeywell from $242 to $300, while maintaining its Buy recommendation on the stock.

In a research note, the analyst said he welcomed yesterday's announcement by the American industrial conglomerate that it was studying a potential spin-off of its aerospace activities.

In his view, this is a positive element in view of (1) the share's ongoing underperformance, (2) the existence of an unjustified discount to its intrinsic value, and (3) the recent letter sent by activist investor Elliott advocating a possible break-up of the company.

For Berenberg, the highly "probable" scenario of a demerger could thus generate a potential upside of 46%.

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