Should You Be Worried About Honeywell Stock?

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Honeywell International (HON) raised its full-year outlook on its October 22, 2026 call after management said organic sales grew 7% in the third quarter. The update is reassuring for shareholders, but one corner of the company is still waiting on its customers. Some buyers are holding back purchases, an issue management raised itself on the call. So what exactly are those customers putting off?

Honeywell’s Utility Customers Are Delaying Meter Rollouts

Management said on the call that utilities across the industry are putting off meter deployments. Industrial Automation posted a 4% increase in organic sales for the third quarter, led by double-digit growth in solutions. Product sales were roughly flat, however, as those deferrals offset demand for sensing and industrial measurement products.

How Much Rides On Honeywell’s Industrial Automation Business?

The meter deferrals showed up in Industrial Automation, a segment that had revenue of $9.4 billion in fiscal 2025, down 6.5% from a year earlier. That figure accounted for 25.1% of company revenue in a year that still included Aerospace Technologies, which Honeywell has since spun off. The segment also shrank 6.6% in fiscal 2024, so the meter delay lands on a business that has been getting smaller for two years. Building Automation, by contrast, grew 12.6% in fiscal 2025.

Honeywell is still testing its new gas meter with several utilities. Management said this cycle could take 6 to 9 months, and it expects major rollouts from 2027 onwards. That is a forecast, not an order.

The stock trades at 10.0 times trailing earnings, against 22.9 for the S&P 500. Those earnings include quarters from before the Aerospace spin-off and fiscal Q2 2026, when net income of $5.68 billion was more than three times operating income of $1.79 billion, so the 10.0 multiple is not a clean read on today’s company. The shares closed on October 23 at 10.9% below their high of March 2, 2026.

How Worried Should Honeywell Holders Be?

Honeywell stock has fallen in past market shocks, dropping by less than the broader market in some instances and by more in others. In the 2022 inflation shock, the shares fell 18.0%, against 24.0% for the S&P 500. During the 2023 shock to bond yields, the stock declined 16.0%, against 9.5% for the index.

The meter delay looks like a real risk, but a slow one: it sits inside one segment, and management has told holders to expect it. For that risk to be worth taking, the utilities testing Honeywell’s gas meter need to turn into buyers. Industrial Automation’s organic sales growth, which came in at 4% in the third quarter, is the measure to watch when Honeywell reports in January 2027.

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