HON US S&P 500NASDAQ-100DJIARussell 1000 Earnings call · transcribed from the recording

Honeywell Technologies (HON) · Q3 2026 results and valuation

Share price: $227.64 · 2026-11-11

Honeywell Technologies operates in building automation, industrial automation, and energy and sustainability solutions. The company provides these services and products to global markets and operates Sandia National Laboratories under contract with the U.S. Department of Energy. Source: Wikipedia

Results Q3 2026 vs Q2 2026 · previous quarter · published 22 Oct 2026 and 23 Jul 2026

Net income down 88.3% on the previous quarter. Management sounded very upbeat, though noticeably less so answering analysts.

1 · Numbers

−88.3%

Net income vs Q2 2026

Outlook given

Net income 664.0M vs 5.68B

Revenue −48.6%

Against the same quarter last year (Q3 2025) it is −63.6%, so it is not just seasonal.

2 · How management spoke

Very upbeat

More upbeat than 93% of company calls

Answers to analysts: upbeat, but clearly less so than the script.

Similar to last call.

3 · What stood out

Honeywell Technologies raised its 2026 outlook across all metrics due to current performance and a backlog of nearly $19 billion.

Valuation

Is Honeywell Technologies undervalued?

Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.

At 1.8% growth a year (3-year revenue growth), the model's fair value is $149.43 a share — the stock trades 52% above it. Today's price assumes 6.0% growth a year.

Current price

$227.64

close of 2026-11-11

Market implies growth of i

+6.0% for 10 yrs

Fair value / share

$149.43

Buy below

$112.07

Price vs fair value

Overvalued 52%

Price vs buy-below price

Overvalued 103%

Management expects

Sales +7% · from the Q3 2026 report: “The company delivered 7% organic sales growth above the high end of the targets unveiled at Investor Day in June.”

A guidance figure for sales, usually one year ahead, not a 10-year free-cash-flow rate.

FCF growth / yr i Discount rate i Terminal growth i Margin of safety i

Official channels

The company's own website and social media accounts.

Read between the lines

Guidance

Free cash flow guidance increased by $100 million to $2.1 billion due to higher income conversion.
Guidance

HON raised its 2026 outlook across all metrics due to current performance and a backlog of nearly $19 billion.
Guidance

HON expects the year to end at 22%.
Key theme

The company expects to progress toward more mid single digit growth as it laps from 26 to 27.

Source quote
“And we do expect that it will continue to progress and find it pathway to more mid single digit growth as we lap from 26 to 27.”
Figure

Segment profit grew 23% and segment margin expanded 370 basis points to 21.3% due to productivity, cost elimination, strategic pricing, and volume leverage.

Source quote
“On profitability, segment profit grew 23% and segment margin expanded 370 basis points to 21.3% driven by productivity, accelerated stranded cost elimination, as well as strategic pricing actions and volume leverage.”

4 more

Figure

The company aims for a 15% target but expects this year's results to be between 12% and 13% as they work toward that goal.

Source quote
“Our aspiration is 15%. We want to have high aspiration. This year probably will be slightly shy of that, more like 12, 13, but we'll continue to work our way through to get closer to 15% every year.”
Guidance

Completion of a six to nine month cycle is expected to lead into a major rollout starting in 2027 for several years.
Guidance

The company delivered 7% organic sales growth above the high end of the targets unveiled at Investor Day in June.
Guidance

The company expects 2027 organic growth to be at or above its long-term growth algorithm due to robust backlog growth and commercial momentum.

Tone

How upbeat the language was, compared with other companiesi. Dot: Q3 2026. Ring: Q2 2026.

Prepared remarks Very upbeat (was very upbeat)

Answers to analysts Upbeat (was upbeat)

Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 84% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.

Sentences that drove the tone

“On profitability, segment profit grew 23% and segment margin expanded 370 basis points to 21.3% driven by productivity, accelerated stranded cost elimination, as well as strategic pricing actions and volume...”

“As our third quarter results have demonstrated, we have strong position in growing end markets, differentiated offerings, and clear competitive advantage in higher growth verticals like LNG and data centers.”

“Our eighth straight quarter of high single digit growth, evidence that we continue to gain share in the market.”

Full figures

USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)

Metric	Q3 2026period end 2026-09-30	Q2 2026period end 2026-06-30	Change	Q3 2025	YoY
Revenue	4.99B	9.72B	−48.6%	4.93B	+1.3%
Gross profit	2.02B	3.65B	−44.8%	1.77B	+13.8%
Operating income	1.06B	2.24B	−52.6%	866.0M	+22.6%
Net income	664.0M	5.68B	−88.3%	1.82B	−63.6%
EPS	2.08	17.83	−88.3%	5.71	−63.6%
P/E today 14.9	14.3	12.2	+2.1	12.2	+2.1

Topics

Most discussed now

Its first quarter as a standalone pure play automation company was a clear demonstration of the value creation strategy Honeywell…
Its eighth straight quarter of high single digit growth, evidence that Honeywell Technologies continues to gain share in the market.
Process automation technology sales grew 8% organically, led by double-digit growth in projects and return to growth in aftermarket, led...
Honeywell Technologies surpassed its expectations across most metrics, and it sees encouraging demand signal in many key end markets.
Honeywell Technologies is also launching new offering on its Forge platform, both in building automation and process automation technology…

Faded since Q2 2026

Fading At Investor Day, Honeywell Technologies laid out its go-forward strategy of growing and monetizing its installed base through outcome-based…
Fading Honeywell Technologies also expanded segment margin by 100 basis points, overcoming significant cost inflation headwinds and unfavorable…
Fading All in, another strong quarter from Vimal and the Building Automation team.
Fading This, combined with Honeywell Technologies' focus on increasing exposure on higher-growth verticals, driving annual recurring revenue…

Latest announcements

Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.

2026-10-22 Results of operations · SEC 8-K
Honeywell Technologies reported third-quarter sales of $5.0 billion, up 1% reported and 7% organic year over year, with adjusted earnings per share of $2.27, up 34% from the previous year.
2026-08-19 Director or officer change; Regulation FD disclosure · SEC 8-K
Honeywell Technologies announced that Billal Hammoud will become President and CEO of Process Technology on October 1, 2026, while Juan Picon will succeed him as President and CEO of Building Automation.
2026-07-23 Results of operations · SEC 8-K
Honeywell Technologies reported sales of $5.2 billion for the second quarter of 2026, representing a 3% increase in reported sales and 4% organic growth compared to the previous year.
2026-06-29 Material agreement; Acquisition or disposal; Results of operations; Change to shareholder rights; Director or officer change; Articles or bylaws amended; Regulation FD disclosure · SEC 8-K
Honeywell Technologies completed the spin-off of its Aerospace business and executed a 1-for-2 reverse stock split, reducing the number of outstanding shares from approximately 634 million to 317 million.
2026-06-15 Director or officer change; Regulation FD disclosure; Other events · SEC 8-K
Honeywell's Board of Directors approved the spin-off of Honeywell Aerospace, with the distribution of one share of Honeywell Aerospace common stock for every two shares of Honeywell common stock scheduled for June 29, 2026.
2026-06-05 Regulation FD disclosure; Other events · SEC 8-K
Honeywell set a June 15, 2026 record date for the Aerospace spin-off and a 1-for-2 reverse stock split expected on June 29, 2026, reducing outstanding shares from approximately 634 million to 317 million.
2026-06-02 Director or officer change; Regulation FD disclosure · SEC 8-K
Honeywell appointed Jillian Evanko, CEO of Duravant, LLC, as an Independent Director and Audit Committee member effective June 1, 2026.
2026-05-27 Shareholder vote results · SEC 8-K · routine

Catalyst calendar

management-stated targets — from the latest earnings call; plans, not promises.

fourth quarter

cash conversion to be above 100%

Source quote
“To round out the story, the cash conversion accelerated to 95% for the quarter, and we expect to be above 100% conversion in the fourth quarter.”
fourth quarter

orders to grow in the high single-digit range, excluding the large LNG award

Source quote
“Looking ahead to the fourth quarter, we expect orders to grow in the high single-digit range, excluding the large LNG award shown in the chart on slide 4.”
2027

organic growth to be at or above our long-term growth algorithm

Source quote
“In conclusion, we are seeing robust backlog growth and commercial momentum across our business, and we expect 2027 organic growth to be at or above our long-term growth algorithm.”
fourth quarter

delivery of 22% segment margin in industrial automation

Source quote
“the business firmly on path to deliver 22% segment margin in the fourth quarter.”
fourth quarter

free cash flow conversion to be above 100%

Source quote
“We expect free cash flow conversion to be above 100% in the fourth quarter as we drive working capital improvements, including strong receivable collections.”