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HON's Process Automation Weakness Persists: What's Impeding Its Growth?
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Key Takeaways
Honeywell Technologies' Process Automation organic revenues fell 1% in Q2 after a 6% drop in Q1.
Aftermarket organic sales declined 6% on lower refining catalyst shipments and project delays.
Honeywell Technologies' Process Technology orders rose 24% as LNG demand and automation projects strengthened.
Honeywell Technologies (HON - Free Report) has been witnessing persistent weakness in the Process Automation and Technology segment. In the second quarter of 2026, the segment’s organic revenues decreased 1% year over year, following a 6% decline in the first quarter.
This decline was attributable to a 6% drop in organic sales in the aftermarket business owing to lower refining catalyst shipments and project delays. In the quarter, the segment margin declined 180 basis points to 22.1% owing to low catalyst volumes and unfavorable product mix. Although second-quarter orders in the Middle East grew organically, the segment’s operations remain exposed to the ongoing geopolitical tensions in the region.
Nevertheless, strong process technology liquefied natural gas (LNG) demand and an increase in automation projects bode well for the segment. In the second quarter, the Process Technology segment’s orders grew 24% year over year, while project sales grew 5% on an organic basis.
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.
Business Performance of HON's Peers
RBC Bearings Incorporated (RBC - Free Report) is witnessing strength in the Industrial segment (revenues increased 8.4% year over year in first-quarter fiscal 2027). 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. Strong momentum in abrasives, industrial adhesives and tapes, specialties, roofing granules, personal safety and electrical markets has been driving the segment’s performance. Organic sales from 3M’s Safety and Industrial segment grew 8.2% year over year in the second quarter of 2026.
The Zacks Rundown for HON
From a valuation standpoint, HON is trading at a forward price-to-earnings ratio of 24.21X, above the industry average of 15.58X. HON carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Honeywell Technologies’ earnings for 2026 has declined in the past 60 days.
Image Source: Zacks Investment Research
HON stock currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
HON's Process Automation Weakness Persists: What's Impeding Its Growth?
Key Takeaways
Honeywell Technologies (HON - Free Report) has been witnessing persistent weakness in the Process Automation and Technology segment. In the second quarter of 2026, the segment’s organic revenues decreased 1% year over year, following a 6% decline in the first quarter.
This decline was attributable to a 6% drop in organic sales in the aftermarket business owing to lower refining catalyst shipments and project delays. In the quarter, the segment margin declined 180 basis points to 22.1% owing to low catalyst volumes and unfavorable product mix. Although second-quarter orders in the Middle East grew organically, the segment’s operations remain exposed to the ongoing geopolitical tensions in the region.
Nevertheless, strong process technology liquefied natural gas (LNG) demand and an increase in automation projects bode well for the segment. In the second quarter, the Process Technology segment’s orders grew 24% year over year, while project sales grew 5% on an organic basis.
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.
Business Performance of HON's Peers
RBC Bearings Incorporated (RBC - Free Report) is witnessing strength in the Industrial segment (revenues increased 8.4% year over year in first-quarter fiscal 2027). 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. Strong momentum in abrasives, industrial adhesives and tapes, specialties, roofing granules, personal safety and electrical markets has been driving the segment’s performance. Organic sales from 3M’s Safety and Industrial segment grew 8.2% year over year in the second quarter of 2026.
The Zacks Rundown for HON
From a valuation standpoint, HON is trading at a forward price-to-earnings ratio of 24.21X, above the industry average of 15.58X. HON carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Honeywell Technologies’ earnings for 2026 has declined in the past 60 days.
Image Source: Zacks Investment Research
HON stock currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.