HON's Process Automation Weakness Persists: What's Impeding Its Growth?

Honeywell Technologies HON 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 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, 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.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research