Why You Should Think About Honeywell Differently Now

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Honeywell International (HON) stock trades at 10.1 times its earnings over the last twelve months, compared with 22.8 for the S&P 500. But that period includes Aerospace, spun off on June 29, 2026. Four quarters like its first standalone one, $0.664 billion of profit, would put the multiple near 27. Honeywell generated trailing net income of $7.05 billion, and $5.68 billion of that total came in the single quarter ended June 30, 2026. Shareholders paying that price need to know what they are buying, and the company's priorities have changed. During its fiscal Q4 2024 call in February 2025, management made the case for separating the aerospace business from automation. So what does management emphasize now?

Honeywell Now Calls Itself A Pure-Play Automation Company

Management now emphasizes automation. On the fiscal Q3 2026 call on October 22, 2026, it said its "transformation into a pure play automation company is complete." The company discussed higher-growth markets like LNG and data centers, and said the growth inflection it expected in Process Automation and Technology is occurring.

During the fiscal Q4 2024 call, management said it would pursue a full separation of automation and aerospace, and that the split was in the best interest of Honeywell shareholders. On the fiscal Q2 2026 call in July 2026, management said it had completed the separation of Honeywell Aerospace. Aerospace is no longer a business management emphasizes, because it is no longer part of Honeywell.

How Big Was Aerospace Next To Honeywell's Automation Businesses?

Aerospace Technologies was Honeywell's largest segment, recording $17.5 billion of sales in fiscal 2025. That figure accounted for 46.8% of company revenue that year, a period when its segment revenue grew 13.3%.

Building Automation and Industrial Automation, two of the automation segments management discussed on its latest call, were smaller and grew more slowly. Building Automation sold $7.37 billion in fiscal 2025, up 12.6% from a year earlier. Industrial Automation sold $9.4 billion, and its revenue fell 6.5%. Together, those two segments generated less sales than Aerospace Technologies did on its own, and one of them shrank. A fourth segment, Energy and Sustainability Solutions, sold $3.13 billion in fiscal 2025. On its latest call, management also reported on a Process Automation and Technology segment, which is not in that fiscal 2025 list.

Is Honeywell's New Focus Reassuring For Shareholders?

Mostly, yes. Management said sales grew 7% organically in fiscal Q3 2026, citing strength across all segments. It then raised its full-year organic growth outlook to 4% to 5%, up from 3% to 4%. In the quarter, Process Automation and Technology sales grew 8% organically.

The concern is Industrial Automation, the segment that shrank in fiscal 2025. Its organic sales grew 4% in fiscal Q3 2026, management said, trailing the 8% organic growth for Building Automation. Product sales in the unit were roughly flat, and management pointed to industry-wide deferrals in meter deployments by utilities. Asked about the delays, CEO Vimal Kapur called them more of an upside opportunity, expecting major rollouts from 2027 once utilities finish testing.

Industrial Automation's organic sales growth is the number to watch when Honeywell reports again, expected in January 2027.

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