Honeywell Aerospace Stock Suffers as Supply Chain Bottleneck Persists

Honeywell Aerospace's stock has taken a hit, trading at about 54% of its 52-week high. Despite orders climbing 8% over the past year and a book-to-bill ratio of 1.1, the company is struggling to meet demand due to supply chain issues.

The bottleneck is narrow, with only 2% of Honeywell's 3,000 suppliers being constrained or critical. These choke points are in castings, forgings, complex machining, and bearings. One supplier alone has $15 million worth of past-due deliveries, holding up hundreds of millions of dollars of revenue.

Honeywell Aerospace is prioritizing output to its original-equipment customers and domestic defense contracts, leaving the commercial aftermarket and international defense waiting. This means that while demand remains strong, revenue growth will likely be impacted.