Honeywell International (HON) JPMorgan Industrials Conference 2026 summary

Macroeconomic and geopolitical environment

• Middle East exposure represents high single digits of annual revenue, with minimal shipment delays and no significant impact from current conflicts expected for the quarter or year.

• Higher oil prices could drive increased investment in refining and catalysts, but inflation risks require pricing discipline.

• No slowdown in air traffic or demand observed due to Middle East events; outlook remains stable.

Segment performance and growth drivers

• Building Automation (BA) is performing strongly, with orders up 5% quarter-to-date and expected mid-single-digit growth, supported by a robust backlog converting in the second half.

• Growth verticals such as data centers, hospitality, and healthcare now comprise 20% of BA revenue and are growing 2.5–3x faster than the rest of the business.

• Data center business in BA has grown from 0% to 5% of revenue in three years, with continued scaling expected.

• LNG business is sold out for the next 2.5 years, with over $700 million in orders last year and potential to exceed $1 billion annually.

• Industrial Automation and other segments are expected to see growth inflection in the second half, with mid-single-digit growth targeted for next year.

Technology, innovation, and business model evolution

• Significant focus on connecting installed base through the Forge platform, with only 10% of assets currently connected; value-sharing pricing models are being adopted.

• AI applications are being developed on Forge, aiming for self-learning and autonomous building operations; BA is leading in this area.

• Software and ARR are increasingly important, with HPS software business nearing $1 billion and growing at high single to double digits.

• Services ARR in BA is 40% of revenue, with a goal to reach 60% in the coming years.