Honeywell's Strategic Position in Industrial Automation and AI-Driven Growth: A Picks and Shovels Play for FY26 Earnings Momentum

This thesis is reinforced by Honeywell's recent partnership with the Charlotte Hornets, a high-profile collaboration that exemplifies its ability to deploy AI-driven technologies in real-world settings. Under the multi-year agreement, Honeywell is implementing its Forge platform and AI-powered solutions across the Hornets' facilities, including the Spectrum Center and the Novant Health Performance Center. These upgrades include unified security systems via the LenelS2 OnGuard Access Control platform, real-time energy management, and the XLS4000 smart fire detection system. By transforming these facilities into "smarter, safer, and more connected environments," Honeywell not only enhances operational efficiency but also demonstrates the scalability of its solutions to other industrial and commercial clients.

Honeywell Forge: The Engine of AI-Driven Growth

At the heart of Honeywell's strategy is the Honeywell Forge platform, a digital industrial automation and AI ecosystem. The platform's integration into the Charlotte Hornets partnership highlights its versatility, enabling real-time energy optimization and emergency readiness while reducing operational costs. Beyond sports facilities, Forge is being deployed across diverse sectors, including manufacturing, logistics, and retail, to streamline workflows and improve outcomes-based solutions.

Recent financial results underscore the platform's impact. In Q3 2025, Honeywell reported $10.4 billion in sales, with organic growth of 6%, exceeding guidance. CEO Vimal Kapur attributed this success to the "successful execution of connected offerings" through Forge, which has driven recurring revenue and customer retention. The platform's expansion into workforce performance tools-such as an AI assistant for frontline workers in retail and logistics-further diversifies Honeywell's revenue streams and solidifies its leadership in enterprise-scale digital transformation.

Catalysts for FY26 Earnings Momentum

The Charlotte Hornets partnership and Honeywell Forge's performance are not isolated developments but part of a broader narrative of strategic alignment with industrial tech trends. Evercore ISI's "Outperform" rating is predicated on Honeywell's ability to capitalize on these trends, with earnings momentum expected to accelerate in FY26. Key drivers include:
1. Recurring Revenue Models: Forge's subscription-based structure ensures steady cash flows, reducing reliance on one-time sales.
2. Cross-Sector Scalability: The platform's deployment in sports, healthcare, and logistics illustrates its adaptability, opening new markets.
3. Operational Efficiency Gains: AI-driven energy management and security systems reduce costs for clients, creating a value proposition that drives adoption.

Moreover, Honeywell's recent AI innovations-such as the XLS4000's self-testing functionality-address critical pain points like emergency preparedness and cost optimization. These advancements align with global priorities around sustainability and safety, further broadening the platform's appeal.

Conclusion: A Compelling Case for Long-Term Growth

Honeywell's strategic positioning as a "picks and shovels" provider in the industrial automation and AI space is underpinned by its technological leadership, financial performance, and high-visibility partnerships. Evercore ISI's endorsement, coupled with the Charlotte Hornets collaboration and Forge's expanding capabilities, creates a robust foundation for FY26 earnings growth. As industries continue to prioritize digital transformation, Honeywell's ability to deliver scalable, AI-powered solutions will likely cement its role as a key beneficiary of this industrial renaissance.