Honeywell Aerospace, a $52 billion aerospace giant, revised its 2026 revenue growth guidance downward to a 4% to 5% range, down from its earlier target of 6% to 8% compound annual growth. The company has maintained a long-term CAGR target of 6% to 8% through 2030 but acknowledged that supply chain disruptions are clouding near-term prospects. The stock has fallen 45% from its 52-week high of $297.50 to $160.66, marking an 18% decline over the past six months as supply woes persist.
Jim Currier, CEO of Honeywell Aerospace since late 2023, has shifted strategy from cost-cutting during the COVID-19 pandemic to reinvesting over $1 billion in the supply base. While the number of constrained suppliers has decreased to around 70—from hundreds in 2022—four critical areas remain severely affected: complex machining, castings, forgings, and bearings. Despite progress, 10 suppliers still face severe constraints.
Recent efforts to address these issues have yielded mixed results. Output in complex machining rose 30% year-over-year over a 30- to 45-day window after deploying skilled workers at supplier sites. In bearings, Honeywell delivered 35% of annual demand in a single 90-day quarter by relocating a supplier facility and adding a second source. However, these improvements have not fully offset broader supply bottlenecks.
Honeywell Aerospace reported $17.91 billion in revenue for the last twelve months, with a gross profit margin of 34.54%. The company has secured $105 billion in aircraft orders over the past four years and $15 billion year-to-date, including wins with major airlines like IndiGo. Defense segment performance varied, with domestic growth of 10% year-over-year and international revenue declining in the high single digits. International defense book-to-bill ratios remain strong at about 1.5x, growing in double digits.
The company’s research and development spending remains robust, accounting for 10% to 11% of revenue, with about 6% funded by customers and over 4% internally. Key products include the Anthem cockpit (sixth-generation), HTF7000 engine, Honeywell Assure electromechanical actuation, and Intune vapor cycle cooling systems. Analysts have revised earnings expectations downward for the upcoming period, with nine analysts adjusting their forecasts in the same direction.
While Currier has been CEO of Honeywell Aerospace as a standalone entity for about two and a half months, the company’s supply chain challenges remain a critical hurdle. The shift from single-sourcing and outsourcing strategies from 2010 to 2019 to a more diversified approach has taken time, and the full impact of these efforts is yet to be fully realized.
