Honeywell's Industrial Automation Unit Hit by Weak Sales: Recovery Ahead?

Honeywell International Inc. HON has been witnessing persistent weakness in the Industrial Automation segment. In the second quarter of 2025, revenues from the segment declined 5% on a year-over-year basis. Softness in the productivity solutions and services business, owing to project slowdown, remains a concern for the segment.Sales from the warehouse and workflow solutions business declined 4% year over year, owing to the timing of large project execution. The Productivity solutions and services unit also witnessed 7% sales decline, largely due to the challenging demand environment in Europe. Within the Industrial Automation segment, sales from the products group fell 7.4% in the second quarter, while those from the services group remained relatively stable. Softness in the industrial market due to a slowdown in the overall manufacturing sector might impede the segment’s growth in the near term. For 2025, it anticipates that the Industrial Automation segment’s organic sales will decline in the low to mid-single digit range.Nevertheless, strength in the commercial aviation and building automation businesses augurs well for Honeywell. The Aerospace segment is particularly strong, driven by strength in the defense business and growth in air transport flight hours.Business Performance of HON's PeersGE Aerospace GE is gaining from strong demand for LEAP, GEnx & GE9X engines and services within the Commercial Engines & Services business. The Commercial Engines & Services business’ revenues and orders jumped 30% and 28%, respectively, on a year-over-year basis in the second quarter. GE Aerospace’s growth is also supported by increasing air traffic, fleet renewal and expansion activities. During the second quarter of 2025, GE Aerospace inked a deal with Qatar Airways to supply more than 400 GE9X and GEnx engines.Another peer, 3M Company MMM, has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in personal safety, roofing granules, industrial adhesives and tapes, abrasives and electrical markets. Stable demand for 3M’s electrical infrastructure products, like medium voltage cable accessories and insulation tapes, augurs well for the segment in the quarters ahead. Organic sales from 3M’s Safety and Industrial segment grew 2.5% year over year in the first six months of 2025.HON's Price Performance, Valuation and EstimatesShares of Honeywell have gained 2.3% in the past six months compared with the industry’s growth of 0.6%.Image Source: Zacks Investment ResearchFrom a valuation standpoint, HON is trading at a forward price-to-earnings ratio of 19.59X, above the industry’s average of 16.42X. Honeywell carries a Value Score of D.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for HON’s 2025 earnings has been on the rise over the past 60 days.Image Source: Zacks Investment ResearchHoneywell currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>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 GE Aerospace (GE): Free Stock Analysis Report Honeywell International Inc. (HON): Free Stock Analysis Report 3M Company (MMM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks