Oppenheimer upgrades Resideo to Outperform after Honeywell deal, ADI spinoff

As previously reported, Oppenheimer upgraded Resideo (REZI) to Outperform from Perform with a $35 price target after the company announced that it has entered into a definitive agreement with Honeywell (HON) to accelerate and eliminate all future monetary obligations under the Indemnification and Reimbursement Agreement the companies entered into in 2018. The deal is “highly positive” as it resolves “a major burden” and will also allow Resideo to spin off its “very high-quality” distribution business, ADI, by the second half of 2026, the analyst tells investors. The firm now feels “comfortable” with a higher sum-of-the-parts valuation given the impending spin makes this analysis “no longer theoretical,” the analyst added.