GET DAILY SIGNALSHoneywell Technologies (HON) Delivers EPS Beat and Raises Full-Year Outlook After Spin-Off
Key Takeaways
- Adjusted earnings per share (EPS) of $2.27 beat the consensus estimate of roughly $2.16 to $2.17 and rose 34% year over year.
- Revenue of $4.99 billion grew 1% from a year earlier but came in slightly below the approximately $5.01 billion consensus.
- Organic sales increased 7%, with growth across all three business segments.
- Segment margin expanded 370 basis points to 21.3%, while free cash flow rose 15% to $688 million.
- Full-year guidance was raised, with adjusted EPS now expected at $8.40 to $8.45 and sales at $20.0 to $20.1 billion.
- Shares dipped as much as 3.5% early before recovering to a modest gain.
Why This Report Matters for the Reshaped Honeywell
This marks HON’s first full quarter operating as a standalone industrial technology company following the aerospace separation, now under the Honeywell Technologies name. The results also reflect the impact of recent divestitures in warehouse and productivity solutions. For investors, the quarter provides an early look at how the streamlined portfolio is performing in automation, building technologies, and energy-related areas, and whether it can deliver on the longer-term targets set out at the June Investor Day.
Breaking Down the Quarter’s Numbers
HON posted third-quarter 2026 adjusted EPS of $2.27, up 34% from a year earlier and ahead of the roughly $2.16 to $2.17 consensus. Revenue reached $4.99 billion, a 1% reported increase that fell just short of the $5.01 billion estimate. Organic sales, excluding acquisitions, divestitures, and currency effects, advanced 7%. I also checked comparable industrial names using Tickeron’s AI Screener to see how the results stacked up against peers.
Margins improved notably. Segment profit rose 23%, and segment margin widened 370 basis points to 21.3%. Operating margin expanded 640 basis points to 14.8%. Free cash flow grew 15% to $688 million, with conversion at 95%. Backlog climbed 7% to nearly $19 billion, and data center orders more than doubled. Organic sales rose 8% in Building Automation, 8% in Process Automation and Technology, and 4% in Industrial Automation.
Management lifted full-year guidance, now calling for adjusted EPS of $8.40 to $8.45 (previously $8.05 to $8.35), sales of $20.0 to $20.1 billion, organic growth of 4% to 5%, segment margin near 20.5%, and free cash flow of about $2.1 billion.
How the Market Responded
Shares initially fell as much as 3.5%, touching around $207.28, before recovering to roughly $216.45, a gain of about 0.8% by midday. The early reaction appeared tied to the modest revenue miss and margin pressures in Process Automation and Technology linked to project mix and the Johnson Matthey acquisition. From what I see, the overall tone stayed constructive given the earnings beat, organic growth, and raised guidance in the company’s first post-spin quarter.
What to Watch in the Final Quarter and Beyond
Management now expects 5% to 6% organic growth in the fourth quarter and adjusted EPS of $2.42 to $2.47. Free cash flow conversion is projected above 100% as working capital improves. Key areas to monitor include the nearly $19 billion backlog and book-to-bill trends, margin trends in Process Automation and Technology amid project mix and acquisition integration, and progress toward reducing gross leverage below 3x by year-end, with gross debt targeted under $13 billion and cash around $3 billion. Demand in data center, LNG, refining, and low-carbon projects will also remain important, as these have driven much of the recent momentum.
Refining My Research with Tickeron Tools
In my regular analysis workflow, I turn to Tickeron’s AI Screener to quickly filter industrial technology names by fundamentals, technical patterns, and AI-driven signals. It helps surface comparable ideas and track how peers are performing relative to HON, saving time when evaluating earnings quality and sector trends. I also cross-checked recent signals with Tickeron’s AI Daily Buy/Sell Signals for additional context on momentum.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Momentum Indicator for HON turns positive, indicating new upward trend
HON saw its Momentum Indicator move above the 0 level on October 20, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 93 similar instances where the indicator turned positive. In 50 of the 93 cases, the stock moved higher in the following days. The odds of a move higher are at 54%.
Technical Analysis (Indicators)
Bullish Trend Analysis
HON moved above its 50-day moving average on October 20, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +2.26% 3-day Advance, the price is estimated to grow further. Considering data from situations where HON advanced for three days, in 144 of 314 cases, the price rose further within the following month. The odds of a continued upward trend are 46%.
The Aroon Indicator entered an Uptrend today. In 96 of 246 cases where HON Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 39%.
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HON declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 50%.
HON broke above its upper Bollinger Band on September 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 22 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 63 (best 1 - 100 worst), indicating fairly steady price growth. HON’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 76 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.671) is normal, around the industry mean (-0.832). P/E Ratio (8.288) is within average values for comparable stocks, (16.940). HON's Projected Growth (PEG Ratio) (3.457) is very high in comparison to the industry average of (0.772). Dividend Yield (0.013) settles around the average of (510.270) among similar stocks. P/S Ratio (1.742) is also within normal values, averaging (2.059).
The Tickeron PE Growth Rating for this company is 94 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. HON’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock worse than average.
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General Information
an industrial conglomerate which operates as a diversified technology and manufacturing company
Industry IndustrialConglomerates
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