Do 3M, Honeywell, GE buy after quarterly reports?

Industrials 3M (NYSE: MMM), Honeywell (NASDAQ: HON) and General Electric (NYSE: GE) are all trading higher following recent earnings reports.

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A truism about the industrial sector: the activities of these companies are intimately linked to economic cycles. We may be familiar with the consumer products offered by these companies, such as post-it notes from 3M, air purifiers and humidifiers from Honeywell, and light bulbs from GE.

However, all of these companies are also widely exposed to commercial and enterprise customers. This means they are feeling the effects of cyclical demand as the economy goes up and down, and companies and manufacturers increase and decrease their purchases.

Despite widespread recession concerns, the broader industrial sector, tracked by the SPDR Industrial Select Sector ETF (NYSEARCA:XLI), is down 8.49% year-to-date, but it participated in the recent general rally in the market, showing a month-on-month gain of 9.30%.

The most heavily weighted components within the sector and their one-month returns are:

United Parcel Service (NYSE: UPS): +5.77% Union Pacific (NYSE:UNP): +8.66% Raytheon Technologies (NYSE: RTX): -4.12%

3M, which accounts for 3.08% of the sector's weighting, released its quarterly results on July 26, and the stock has been in free fall ever since. Earnings were $2.48 per share, down 10% year over year. Revenue was $8.7 billion, down 3%. This marked the second consecutive quarter of declining profits. On the revenue side, 3M had no revenue growth in the previous two quarters.

The stock has returned a whopping 15.35% over the past month.

So what's the benefit here? Why is the stock rising?

The company announced a spin-off of its healthcare technology business focused on wound care, oral care, medical informatics and biopharmaceutical filtration. It expects the tax-free transaction to be completed by the end of 2023. It previously announced a transaction to spin off its food safety business, with an expected closing date of September 1, 2022.

Spin-offs can create shareholder value by allowing two different companies to focus on their core businesses. In this case, the new 3M plans to retain a 19.9% ​​stake in Health Care, which it says will be monetized over time.

Meanwhile, Honeywell reported earnings of $2.10 per share on July 28, beating views of $0.07 per share. Revenue hit $8.95 billion, also ahead of views, according to earnings data from MarketBeat.

The company has exceeded earnings expectations in every quarter since October 2017, when it hit the views.

Honeywell's aerospace sales rose, while air travel rebounded. In addition, its business unit serving the oil and gas industry also recorded strong revenues.

Data from MarketBeat analysts reveals that Wall Street has a "Moderate Buy" rating on Honeywell, with a price target of $210.08, up 8.09%.

Over the past month, Honeywell shares have risen 11.90%. The stock remains below its 200-day moving average, but above its 50-day line. When the long-term average is above the short-term average, it can signal that an uptrend may weaken and fail. However, at some point, the trends reverse. There is a slight upward movement in the 50-day line which could possibly indicate a more sustained rally, although it is far too early to know for sure.

General Electric, which accounts for 3.02% of the industrials sector, released its quarterly results on July 26, and the stock traded higher. He benefits from a gain of one month...