TenQ

The Honeywell International story

Honeywell is an automation company after separating Aerospace, with the central question whether building controls, process technology and industrial systems can sustain faster growth without aviation.

Written from Honeywell International's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $211.52share price, last close
  • $67.0Bmarket value
  • 22/36TenQ Score checks passed
  • 4.3%growth a year the price assumes

The story in brief

  • A different Honeywell. The Aerospace separation on June 29, 2026, leaves Honeywell Technologies focused on building, process and industrial automation.
  • Buildings lead growth. Building Automation delivered 9% organic sales growth and 13% segment profit growth in the quarter to June 2026, supported by data center and hospitality demand.
  • Earnings need context. A one-time Quantinuum deconsolidation gain lifted reported earnings in the quarter to June 2026, while adjusted earnings per share excluding Aerospace grew 10% to $1.95.

What drives the business

  • Honeywell’s separation of Aerospace on June 29, 2026, shifts the business toward automation products, services and solutions supported by its installed base and Honeywell Forge software.
  • Building Automation combines building products and services, with fire products helping drive 9% organic sales growth and a 27.1% segment margin in the quarter to June 2026.
  • Process Automation and Technology serves markets including LNG and catalysts, with orders rising 24% in the quarter to June 2026 even as organic sales decreased 1% because weaker aftermarket demand offset project growth.
  • Industrial Automation recorded 4% organic sales growth in the quarter to June 2026, supported by utilities projects, warehouse backlog conversion, sensing and industrial measurement.
  • The acquisition of Johnson Matthey’s Catalyst Technologies business closed on July 17, 2026, while planned divestitures of Productivity Solutions and Services and Warehouse and Workflow Solutions further reshape the automation portfolio.

What the price assumes

At $211.52, the reverse DCF implies free cash flow after stock pay grows 4.3% a year for ten years, using a 10.2% discount rate.

That exceeds the 2.7% annual growth delivered over the last 10 years and the TenQ check’s 3.3% bar, so the growth assumption check fails.

The Aerospace separation limits direct comparison between Honeywell’s historical cash growth and the remaining automation business.

Value HON on your own assumptions

What could change the story

  • Building Automation depends on construction activity, Process Automation and Technology faces oil and gas investment volatility, and Industrial Automation faces reduced investment and commoditization.
  • More than half of sales are outside the U.S., exposing Honeywell to currency fluctuations, tariffs, trade restrictions and geopolitical disruption.
  • Process Automation and Technology’s segment margin contracted 180 basis points to 22.1% in the quarter to June 2026 as lower catalyst volumes and an unfavorable product mix weighed on profitability.
  • The TenQ cash conversion check fails at 0.62 against 0.80, while the Quantinuum gain makes reported earnings a less useful measure of recurring performance.
  • The consolidated balance sheet at June 2026 carried $34.0 billion of debt against $9.2 billion of cash and short-term investments, and the TenQ checks flag weak near-term liquidity and rising debt relative to equity.

What to watch next

  • Honeywell’s 2026 outlook calls for sales of $19.8 billion to $20.0 billion and organic growth of 3% to 4%, including 4% to 6% in the second half, making process and industrial growth important tests of the transition.
  • The next releases will show progress toward the 2026 segment margin range of 20.1% to 20.5% and approximately $2.0 billion of free cash flow.
  • Confirmation of the planned business divestitures, expected in the July 2026 release to close by early August, and the contribution from Johnson Matthey’s Catalyst Technologies business will clarify the remaining portfolio.
  • Separate automation results will matter because the quarter to June 2026 consolidated results still included Aerospace, while Honeywell also presented results excluding that business.

Sources

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