Honeywell Aerospace Cuts Guidance Amid Supply Chain Woes
Honeywell Aerospace, formerly part of Honeywell International, presented its mixed outlook at Morgan Stanley's 14th Annual Laguna Conference. The company sees long-term growth potential but is facing supply chain problems that have led to a cut in 2026 guidance.
Chief Executive Jim Currier stated that the separation from Honeywell International has allowed for faster decision-making and capital allocation, but the current supply base issues are the most significant challenge since the spin-off. The company's original 6% to 8% compound annual growth target for 2026 was revised to 4% to 5%, citing delays, quality issues, and factory bottlenecks.
Honeywell Aerospace is still committed to its 2030 targets, expecting a transition year in 2026. The company has invested over $1 billion in the supply base since 2023 and has narrowed down critical suppliers from hundreds in 2022 to around 70 today, with 10 remaining severely constrained.
The commercial business remains resilient, with strong demand in both air transport and business aviation. However, supply shortages have limited output, leading Honeywell to prioritize original equipment deliveries over aftermarket spares. Defense also showed growth, accounting for about 40% of the company's revenue.