Honeywell Aerospace (HONA.O) shares sank as much as 26% on Thursday, a day after supply-chain issues forced it to cut its annual sales target and forecast profit below estimates.
Shares of the aerospace supplier, last down about 20%, are on track for their worst day since listing, should losses hold.
The company, which debuted on the Nasdaq about a month ago after it was spun off from Honeywell, has said supply constraints are forcing it to prioritize deliveries to Boeing (BA.N) and Airbus (AIR.PA), over its revenue and margin-boosting aftermarket business.
The aircraft engine, parts and defense systems maker expects 2026 organic sales growth of 4% to 5%, down from an earlier forecast of a 7% to 9% increase. It expects annual adjusted earnings per share of $7.60 to $7.90, below analysts' expectation of $8.86, according to data compiled by LSEG.
J.P. Morgan cut its price target on Honeywell Aerospace to a Street-low of $235 from $255, saying its "discount to peers is likely to widen following these results."
With the company having a few shortfalls already this year, analysts at the brokerage expect investors to wait for proven results.
Jefferies, which also has a $235 target price, said investors were left puzzled on how an aero company is growing only 4%.
Honeywell Aerospace's second-quarter adjusted profit per share fell 32% to $1.87 compared to the previous year, while sales rose 5% to $4.52 billion, with both figures missing analysts' expectations.
"It's really resetting the forecast based on what we're seeing coming through the supply chain. And that's where we've been most impacted, is by the lack of ramp in that supply," finance chief Josh Jepsen told Reuters in an interview.
Still, while the supply chain bottlenecks disclosed last night "have left HONA starting behind the curve... the shortfall does not seem insurmountable at this point," J.P. Morgan analysts led by Seth M Seifman noted.
