HON Stock Declines 51.5% in 6 Months: Should You Buy, Hold or Sell?

Honeywell Technologies HON shares have declined 51.5% over the trailing six months, underperforming the Zacks Diversified Operations industry’s 20.9% decline and the S&P 500’s 13% growth. Shares of its peers like Rockwell Automation ROK and Emerson Electric Co. EMR have gained 13.8% and 8%, respectively, over the same time frame.

HON Stock’s Six-Month Price Performance

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Closing at $233.96 in the last trading session, the stock is trading close to its 52-week high of $260.28 and higher than its 52-week low of $195.87. Honeywell Technologies stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.

HON Stock Trading Above 50-Day & 200-Day Moving Averages

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On June 29, HON became a separate public company following the spin-off of the Aerospace Technologies business from Honeywell International. This marked the completion of Honeywell’s multi-year portfolio restructuring, creating three stand-alone publicly traded companies. The move allows Honeywell Technologies to sharpen its focus on industrial automation and benefit from improved operational focus, capital allocation and financial flexibility.

Let’s take a look at HON’s fundamentals to better analyze how to play the stock.

Persistent Operational and Financial Headwinds Weigh on HON

Honeywell Technologies has been witnessing weakness in the Process Automation and Technology segment. In the second quarter of 2026, the segment’s organic revenues decreased 1% on a year-over-year basis. This decline was attributable to a 6% 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 hurt its Process Automation and Technology segment’s performance in the third quarter as well. However, an increase in demand for liquefied natural gas (LNG) and an increase in automation projects bodes well for the segment.

Honeywell Technologies has been dealing with the adverse impacts of the high cost of sales and operating expenses. On a consolidated basis, the company’s total cost of sales, comprising the cost of products and services sold, was up 7.2% year over year in the second quarter. In the same period, research and development expenses surged 14.2% year over year. Its operating margin fell 190 basis points to 17.9%. The company incurred high costs and expenses related to higher direct and indirect material costs, increased labor costs, investment in digital infrastructure and business integration activities. For standalone Honeywell Technologies, operating margin declined 50 basis points to 12.8% in the second quarter. Escalating expenses, if not controlled, are likely to hurt the company’s bottom line in the quarters ahead.

At the end of the second quarter of 2026, the company’s consolidated long-term debt stood at $26.2 billion, primarily due to funds raised for the Aerospace business spin-off. Against this debt burden, cash and cash equivalents of $8.8 billion appear relatively modest. Interest expenses and other financial charges remained elevated at $363 million in the second quarter, up 10.3% year over year. Including current maturities, Honeywell Technologies’ total debt stood at $31.5 billion at the end of the quarter. Elevated debt could increase financial obligations and put pressure on profitability in the coming quarters.

HON’s Automation Portfolio Supports Growth Momentum

Strong demand for HON’s products and solutions, supported by rising building activity across the Americas, India and the Middle East, is likely to benefit the Building Automation segment. Higher order rates and increased capital investments in data centers and hospitality are also supporting growth. In the second quarter of 2026, the segment’s organic revenues increased 9% year over year. 

Also, the Industrial Automation segment continues to benefit from favorable utilities project timing and solid momentum in sensing and industrial measurement, with organic revenues rising 4% year over year in the second quarter. Exiting the quarter, standalone Honeywell Technologies had a backlog of approximately $20 billion, supported by 16% organic order growth. For 2026, the company expects revenues of $19.8-$20.0 billion, with organic revenues projected to grow 3-4% year over year.

Stock Valuation

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HON has a forward 12-month price-to-earnings ratio of 24.90X, which is above the industry average of 15.79X. In comparison with the company’s valuation, its peer Rockwell is trading at a higher valuation, while Emerson is trading cheaper. Rockwell and Emerson are trading at 30.86X and 23.03X, respectively.

Earnings Estimate Revision

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Earnings estimates for HON have decreased 20.2% over the past 30 days for 2026 and 24.9% for 2027.

Should You Invest in HON Right Now?

HON faces near-term pressure from weak Process Automation demand, rising costs and elevated debt, which could weigh on profitability. However, strong momentum in the Building and Industrial Automation segment, supported by robust order growth and backlog, provides a key growth cushion. Despite these positives, the company’s premium valuation and significant downward revisions to earnings estimates suggest continued caution around its near-term prospects.

Honeywell Technologies currently carries a Zacks Rank #4 (Sell), suggesting investors may consider selling the stock given the near-term challenges and downward earnings estimate revisions. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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