Wolfe Research analyst sees Quantinuum getting a similar valuation boost as IonQ, which has seen its stock price jump 225% this year.

Honeywell International Inc.'s quantum-computing business Quantinuum stands out as a bright spot in the potential breakup of the industrial conglomerate, an analyst said Tuesday.

While Honeywell $(HON)$ focused on its vast Aerospace unit in its announcement Monday that it may break itself up after pressure from $5 billion shareholder Elliott Management, the company also houses Quantinuum, which bills itself as the world's largest integrated quantum company.

Honeywell has been considering an initial public offering for Quantinuum, Bloomberg reported in July.

Wolfe Research analyst Nigel Coe said the Honeywell unit offers a comparable business to IonQ Inc. $(IONQ)$, a red-hot quantum-computing company that's seen its share price jump about 226% this year.

Since Honeywell raised $300 million in January at a $5 billion valuation for Quantinuum, IonQ's stock price has risen sharply, to $9 billion from $2 billion. Based on that gain in price, Quantinuum could be worth roughly $20 billion.

Other hot names include D-Wave Quantum Inc. $(QBTS)$, which has risen 797% in 2024, and Rigetti Computing Inc. (RGTI), up 815% so far this year.

"One interesting part of the sum-of-the-parts jigsaw puzzle is Honeywell's majority stake in Quantinumm," Coe said. "Honeywell is one of the leading players in the quantum computing field and is intent on realizing the value of its investment at the opportune time."

Overall, Coe reiterated a peer perform rating for Honeywell and said any breakup would take time to pay off because of how long it would take to optimize its various business units.

A source familiar with Elliott Management said Quantinuum is thought to be the No. 2 player in the space. On the minus side, Quantinuum is currently losing about $20 million a year, the source said.

It also has a partnership with Microsoft Corp. $(MSFT)$.

Investors in Quantinuum include JPMorgan Chase & Co. $(JPM)$, Amgen Inc. $(AMGN)$ and Mitsui & Co. Quantinuum has also partnered with Microsoft Corp. $(MSFT.UK)$ on quantum-computing technology.

Quantinuum has said its computer technology "drives breakthroughs in materials discovery, cybersecurity and next-generation quantum AI."