When a caller inquired about Honeywell Aerospace Inc. (NASDAQ:HONA) during the lightning round of the September 11 episode of Mad Money, Jim Cramer said:
I can’t counsel owning that… Jim Currier is the CEO, and he told Phil LeBeau three times that things were going quite well and they weren’t. And I heard they were going quite well and they weren’t, and so therefore I have nothing good to say about Honeywell Aerospace.
Cramer had made a similar criticism on August 31, saying Honeywell Aerospace deserved to be the worst stock of the quarter after Currier had told CNBC’s Phil LeBeau three times that conditions were good. He said the company’s performance had instead been “terrible” and “horrible.”
Supply Constraints Have Cut Into Honeywell Aerospace’s Outlook
On August 5, Honeywell Aerospace Inc. cut its 2026 organic sales-growth forecast to 4%-5% from 7%-9%. Second-quarter adjusted EPS fell 32% to $1.87, while sales increased 5% to $4.52 billion. Supply constraints remained an issue as of September 15. Speaking at the Morgan Stanley Laguna Conference, Currier said the company was still dealing with about 70 suppliers that were not producing quality products on time. He said Honeywell had sent skilled workers to two suppliers, helping them add shifts, and that output at those facilities had increased approximately 30% year-over-year during the previous 30 to 45 days.
Supply Constraints Could Also Pressure Honeywell’s Earnings Mix
Supply-chain problems remain a concern for Honeywell Aerospace Inc. following the company’s reduction of its 2026 growth outlook, with supplier quality and delivery issues still requiring attention. The August 5 guidance cut showed that the expected improvement in the supply base had not occurred quickly enough to support the company’s previous outlook.
Beyond the immediate supply constraints, the durability of Honeywell Aerospace’s aftermarket growth is another risk. On September 14, Melius Research analyst Scott Mikus downgraded Honeywell Aerospace to Hold from Buy and lowered his price target to $190, pointing out concerns about the sustainability of elevated aftermarket performance as aircraft production recovers and older aircraft retire. Currier also said on September 15 that Honeywell had taken steps over the previous two years to bring some capabilities that had been outsourced between 2010 and 2019 back in-house. He said “more” needed to be done.
Hedge Fund Positioning and Short Interest
Insider Monkey tracks more than 1,000 hedge funds, and its data showed that 74 hedge funds held HONA in Q2. Additionally, HONA short interest was at roughly 1.5% of the float. Honeywell Aerospace Inc.’s near-term performance will depend heavily on its ability to address the supplier issues that contributed to the August 5 guidance reduction while maintaining its earnings trajectory as a standalone company.
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