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Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuWe’re selling 110 shares of Honeywell Technologies at roughly $209 each. Following Wednesday’s trade, Jim Cramer’s Charitable Trust will own 110 shares of HON, decreasing its weighting in the portfolio to 0.58% from about 1.15%. We’re selling half of our remaining position in Honeywell Technologies and downgrading it from our buy-equivalent 1 rating to our sell-on-further-strength 3 . Honeywell shares turned positive late Tuesday after the company spoke at the Morgan Stanley Laguna Conference. Management delivered an upbeat presentation, indicating organic revenue growth is tracking toward the upper end of its 4% to 6% outlook for the third quarter, and CEO Vimal Kapur said he expects similar momentum in the fourth quarter. These comments were a relief to investors who may have been bracing for signs of softness and a possible guidance cut. At least, that is what the stock’s recent performance has suggested. Even with Wednesday’s additional 2.6% gain, shares are down more than 10% since August in a near-straight line. While pleased to see Honeywell back its guidance, we’re taking a more skeptical stance because of the prolonged conflict in the Middle East. The company lost some revenue in the first and second quarters in this region because of the Iran war, and we suspect these headwinds may linger through the rest of the year given current tensions. Another factor behind our sale is that forward estimates may be too high and will need to come down. When the company spoke at the Deutsche Bank Chicago Industrials Summit in August, management said it expects 15% earnings per share growth in 2027. That’s a rate that keeps the company on the right trajectory to deliver the $12 in adjusted EPS target laid out at its Investor Day. But the problem is that Wall Street expectations are even higher. According to FactSet, analysts are currently modeling around 20% EPS growth in 2027 off of $8.32 in 2026. This disconnect between management’s 15% growth estimates for next year and the Street’s roughly 20% suggests that numbers will need to come down. Lower estimates could pressure the stock. With Tuesday’s positive session extending into Wednesday, we’ll use this strength to sell some shares as we look to move on from the position. We’ve shared in our recent Monthly Meetings how the long-awaited Honeywell breakout did not go according to plan and became a special situation we got wrong. The value unlock we anticipated did not materialize, largely because Honeywell Aerospace slashed its outlook last quarter due to severe supply chain challenges. We exited Honeywell Aerospace shortly thereafter. From this sale of Honeywell Technologies, which focuses on industrial automation products and services, we’ll realize a high single-digit percentage gain on shares purchased in 2023 and 2024. (Jim Cramer’s Charitable Trust is long HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.Read More