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 strong pricing discipline.

• No slowdown in air traffic or demand due to Middle East events; outlook remains stable if conflicts resolve soon.

Segment performance and growth drivers

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

• Growth verticals like data centers, hospitality, and healthcare now comprise 20% of BA revenue, 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.

• Industrial Automation (IA) and Process Technologies (PT) are expected to see backlog conversion and growth in the second half, with mid-single-digit growth targeted.

Technology, innovation, and business model evolution

• Significant investment in new product introductions (NPIs), especially in BA, with over 30 NPIs in fire business last year, mostly on the Forge platform.

• Forge platform is connecting more buildings, with only 10% of the install base connected so far; focus is on value-based pricing and recurring revenue.

• AI applications are being developed on Forge, aiming for autonomous building operations; BA is furthest ahead in this transition.

• Services and annual recurring revenue (ARR) are 40% of BA revenue, with a goal to reach 60% in the coming years.