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Honeywell Losing Grip in Process Automation: What's Impeding Its Growth?
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Key Takeaways
HON's Process Automation and Technology organic revenues fell 6% in Q1 on weaker aftermarket sales.
Honeywell expects the Middle East conflict to reduce Q2 sales by about 1%, weighing on the segment.
HON completed its aerospace spin-off, sharpening its focus on industrial automation and capital allocation.
Honeywell Technologies (HON - Free Report) has been witnessing weakness in the Process Automation and Technology segment. In the first quarter of 2026, the segment’s organic revenues decreased 6% on a year-over-year basis.
This decline was attributable to a 10% drop in organic sales in the aftermarket business owing to lower refining catalyst shipments and project delays. Also, reduced customer demand in the Middle East due to ongoing geopolitical tensions hurt its results. The conflict is likely to have hurt its Process Automation and Technology segment’s performance in the second quarter. HON anticipates the Middle East conflict to have an adverse impact on the segment's sales by 1% in the second quarter.
Nevertheless, growth in orders across petrochemical and refining verticals in the segment is expected to drive its long-term performance. The Process Technology segment’s orders grew 11% year over year in the first quarter.
It is worth noting that on June 29, Honeywell Technologies became a standalone public company following the spin-off of the Aerospace Technologies business from Honeywell International. The separation completed the company's multi-year portfolio restructuring, creating three independent publicly traded companies. With a sharper focus on industrial automation, Honeywell Technologies expects to benefit from improved operational focus, disciplined capital allocation and greater financial flexibility.
Business Performance of HON's Peers
RBC Bearings Incorporated (RBC - Free Report) is witnessing strength in the Industrial segment (revenues increased 5.5% year over year in fourth-quarter fiscal 2026). Stable demand for RBC Bearings’ highly engineered bearings and precision components in food & beverage, semiconductor and warehousing markets bodes well for the segment.
Another peer, 3M Company (MMM - Free Report) , has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in personal safety, industrial adhesives and tapes, and electrical markets. Stable demand for 3M’s electrical infrastructure products, like medium voltage cable accessories and insulation tapes, augurs well for the segment in the quarters ahead. Organic sales from 3M’s Safety and Industrial segment grew 3.2% year over year in the first quarter of 2026.
HON's Price Performance and Valuation
Following the spin-off of the Aerospace business, Honeywell’s shares have lost 2.2% compared with the Zacks Diversified Operations industry’s 3.7% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, HON is trading at a trailing price-to-earnings ratio of 25.09X, above the industry’s average of 15.05X. Honeywell carries a Value Score of F.
Image Source: Zacks Investment Research
Honeywell currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
Honeywell Losing Grip in Process Automation: What's Impeding Its Growth?
Key Takeaways
Honeywell Technologies (HON - Free Report) has been witnessing weakness in the Process Automation and Technology segment. In the first quarter of 2026, the segment’s organic revenues decreased 6% on a year-over-year basis.
This decline was attributable to a 10% drop in organic sales in the aftermarket business owing to lower refining catalyst shipments and project delays. Also, reduced customer demand in the Middle East due to ongoing geopolitical tensions hurt its results. The conflict is likely to have hurt its Process Automation and Technology segment’s performance in the second quarter. HON anticipates the Middle East conflict to have an adverse impact on the segment's sales by 1% in the second quarter.
Nevertheless, growth in orders across petrochemical and refining verticals in the segment is expected to drive its long-term performance. The Process Technology segment’s orders grew 11% year over year in the first quarter.
It is worth noting that on June 29, Honeywell Technologies became a standalone public company following the spin-off of the Aerospace Technologies business from Honeywell International. The separation completed the company's multi-year portfolio restructuring, creating three independent publicly traded companies. With a sharper focus on industrial automation, Honeywell Technologies expects to benefit from improved operational focus, disciplined capital allocation and greater financial flexibility.
Business Performance of HON's Peers
RBC Bearings Incorporated (RBC - Free Report) is witnessing strength in the Industrial segment (revenues increased 5.5% year over year in fourth-quarter fiscal 2026). Stable demand for RBC Bearings’ highly engineered bearings and precision components in food & beverage, semiconductor and warehousing markets bodes well for the segment.
Another peer, 3M Company (MMM - Free Report) , has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in personal safety, industrial adhesives and tapes, and electrical markets. Stable demand for 3M’s electrical infrastructure products, like medium voltage cable accessories and insulation tapes, augurs well for the segment in the quarters ahead. Organic sales from 3M’s Safety and Industrial segment grew 3.2% year over year in the first quarter of 2026.
HON's Price Performance and Valuation
Following the spin-off of the Aerospace business, Honeywell’s shares have lost 2.2% compared with the Zacks Diversified Operations industry’s 3.7% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, HON is trading at a trailing price-to-earnings ratio of 25.09X, above the industry’s average of 15.05X. Honeywell carries a Value Score of F.
Image Source: Zacks Investment Research
Honeywell currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.