Honeywell Aerospace shares plunged nearly 20 percent on Thursday, a day after the newly spun-off company slashed its 2026 sales growth forecast from 7-9 percent to 4-5 percent due to persistent supply chain bottlenecks. Chief financial officer Josh Jepsen cited limitations in converting demand into sales across all end markets.

This admission contrasts with previous assurances from its former parent, Honeywell, that its aerospace division would achieve high single-digit growth. The shares fell as much as 26.3 percent in early trading, eventually settling with a market capitalization of $52 billion.

Despite investor enthusiasm for the aerospace and defence sector, driven by increased global defense spending and the recovery of companies like Boeing, supply chain issues persist. Shortages of skilled labor and components plague the industry. Honeywell Aerospace's CFO noted that supply chain constraints have forced a focus on large customers like Boeing, impacting the more lucrative after-market services sector. CEO Jim Currier acknowledged underestimating the time needed for corrective measures, emphasizing ongoing investments to increase resiliency.