Happy Monday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟩 | US stocks rose today as the latest tariff threat turned out to be less of a headwind than a tailwind.

• 📈 | One Notable Gainer: Steel stocks surged today on news President Trump will levy steep tariffs on steel and aluminum imports. Nucor (NUE) led the pack with a 5.6% gain.

• 📉 | One Notable Decliner: Shares of Disney (DIS) slid 1.4% on reports that the entertainment giant is concerned about the high cost of its theme parks. Join the club! (And, no, not the MMC…)

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MARKET MOVERS

Super Micro, ON Semi, McDonald’s

SMCI (+17.6%) Super Micro Stock Rises. A Big Update Is Coming Tuesday. (Barron’s)

ON (-8.2%) ON Semiconductor dips as Q1 guidance underwhelms on market downturn (SeekingAlpha)

MCD (+4.8%) McDonald's says improving international sales helped overcome US weakness in fourth quarter (AP)

INCY (-7.9%) Incyte Stock Sinks as Sales Forecast for Key Drugs Falls Short (Investopedia)

ROK (+12.5%) Rockwell Automation crushes profit estimates but says customers are still cautious (MarketWatch)

OVERHEARD ON THE STREET

CNBC: President Trump announced 25% tariffs on steel and aluminum imports, with Canada, Mexico, Germany, and Asian exporters expected to be impacted.

Reuters: OpenAI is set to finalize its first custom AI chip this year, developed to reduce reliance on NVIDIA.

AP: JD Vance debuted as VP at a high-stakes AI summit in Paris, using the opportunity to advocate for less stringent AI oversight in Europe.

Barron’s: President Trump stated Palestinians would have no right to return to Gaza under his recovery plan. The Arab world has roundly rejected the proposal.

WSJ: Initial Trump enthusiasm has faded among CEOs and bankers, with tariff threats and uncertainty leading to a quiet deals market.

TOMORROW’S TRADE IDEA, TODAY

Not All Breakups Are Bad

Amicable Breakup

Deutsche Bank (DB) believes that Honeywell’s (HON) breakup could end amicably for all involved.

The mega-conglomerate recently unveiled its plan to split itself up into three independently listed companies, following pressure from activist investor Elliott Management. 

As a result, analyst Nicole DeBlase has raised her rating of the stock to Buy with a $260 price target. That represents nearly 25% upside potential from current price levels.

Less Red Tape

The biggest reason for DeBlase’s bullishness is simple: smaller companies mean less red tape. According to the analyst, the split will allow for three better-focused, better-run companies, able to make their own decisions on how best to utilize their capital. 

DeBlase thinks this will result in better earnings, and the company’s recent guidance seems to support that notion. According to Honeywell, 2025 adjusted earnings should come in between $10.10 and $10.50.

DeBlase believes this is an intentionally low figure designed to set itself up for a solid earnings beat.

Better Things To Come?

Honeywell’s stock is already down 7.7% YTD. This could create a solid entry point for a stock that analysts think is on the cusp of a rebound. Its breakup is certainly going to shake things up — and most believe it will be for the better. 

The 28 analysts covering the stock assign it an average rating of Overweight, according to MarketWatch. Its average price target is below DeBlase’s at $246. But that still represents notable upside from today’s close of $208.52.

Marilyn Monroe famously once said, “Sometimes good things fall apart so better things can come together.” Well, the blonde bombshell also memorably whispered, “Goodnight, honey!” 

Coincidence? Maybe not.

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ON OUR RADAR

CNN: The Philadelphia Eagles won the Super Bowl LIX with a 40-22 victory, dashing the Kansas City Chiefs' three-peat hopes.

AP: Super Bowl commercials focused on comedy and nostalgia, avoiding controversy while leaving surprises for the football field.

CNBC: President Trump ordered an end to penny production to reduce "wasteful" government spending, though it's unclear if he has the authority.

Reuters: The acting chief of the US Consumer Financial Protection Bureau ordered all staff to stay away from the office and cease work tasks.

WSJ: The Journal went deep on Chevron’s explosive breakup with California as it relocated to Texas after 140 years in the Golden State.

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