Honeywell's Building Automation Growth Picks Up: More Upside to Come?
The Building Automation segment's organic sales increased 8% year over year in the second quarter of 2025. Within the segment, sales from the building products business grew 9% with strength across fire, security and building management systems. Sales from the building solutions business also improved 5% led by growth in the Middle East region. Orders increased both sequentially and year over year, led by strength in products.
Software-led new product introductions momentum in the US and high-growth regions and customer wins in focused verticals are likely to continue playing an important role in the segment's overall growth. For 2025, HON anticipates that the Building Automation segment's organic sales will grow in the mid to high-single digits with strong margin performance.
Driven by strength across HON's Building Automation and Aerospace Technologies segments, its overall backlog grew 10% year over year to $36.6 billion. For 2025, Honeywell expects overall revenues to be in the $40.8-$41.3 billion range, with organic revenues expected to be up 4-5% on a year-over-year basis.
Business Performance of HON's Peers
Among its major peers, Carlisle Companies Incorporated CSL is experiencing strong momentum in the Carlisle Construction Materials segment, driven by robust demand for reroofing products and healthy construction activity. Higher sales in the commercial construction market, driven by growing re-roof activity and benefits from the MTL Holdings buyout, have been driving the segment's performance. In the second quarter of 2025, revenues from the Carlisle Construction Materials segment increased 0.6% year over year.
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 Estimates
Shares of Honeywell have gained 10% in the past year compared with the industry 's growth of 1.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, HON is trading at a forward price-to-earnings ratio of 19.64X, above the industry's average of 16.33X. Honeywell carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HON's 2025 earnings has been on the rise over the past 60 days.
Image Source: Zacks Investment Research
Honeywell currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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