Business
Honeywell Aerospace Shares Plunge 20% as Newly Spun-Off Company Slashes 2026 Sales Outlook on Its First Report
Shares of Honeywell Aerospace tumbled Thursday morning, falling 19.96%, or $40.64, to $163.00, after the newly independent aerospace and defense supplier delivered its first quarterly report since separating from Honeywell International and disclosed a significant cut to its full-year sales and earnings guidance, citing persistent supply chain constraints.
The stock’s decline extended a steep drop that began in after-hours trading Wednesday following the release of second-quarter results, when shares initially fell between 10% and 17% before continuing to slide further as regular trading opened Thursday, pushing the stock well below its previous close of $203.64.
A Difficult First Report as an Independent Company
Honeywell Aerospace, based in Phoenix, completed its formal separation from Honeywell International on June 29, becoming an independent, publicly traded company for the first time. Thursday’s results marked the company’s inaugural earnings report as a standalone entity, and while the underlying quarterly performance beat Wall Street’s revenue expectations, investors focused overwhelmingly on the company’s sharply reduced forward guidance.
The company reported second-quarter organic sales of $4.5 billion, up 5% from a year earlier, alongside adjusted earnings of $1.78 per share. While the revenue figure topped analyst expectations, the results were overshadowed by a substantial downward revision to the company’s outlook for the remainder of the year.
Guidance Cut Sends a Clear Signal
Honeywell Aerospace now expects full-year organic sales growth of 4% to 5%, down sharply from its prior forecast of 7% to 9%. The company also projected full-year adjusted earnings per share of $7.60 to $7.90, well below the $8.86 average analyst estimate compiled by LSEG, representing a reduction of roughly 12.5% at the midpoint relative to consensus expectations. Adjusted EBIT guidance was similarly lowered to a range of $4.35 billion to $4.45 billion, down from a previous forecast of $4.65 billion to $4.75 billion, a decline of $300 million, or roughly 6.4%, at the midpoint. Guidance for second-half free cash flow was not revised as part of the update.
Honeywell Aerospace Chief Executive Jim Currier addressed the guidance cut directly, telling investors that the company’s actions so far had not been good enough to keep pace with demand. Currier said that for the second half of 2026, the company believed it was prudent to align its guidance with what its supply chain had actually demonstrated it could deliver by the end of the second quarter, rather than continuing to forecast based on earlier, more optimistic assumptions.
Supply Chain Bottlenecks at the Root of the Problem
The company attributed the bulk of its earnings shortfall to ongoing supply chain constraints, which it said had limited its ability to keep pace with surging aftermarket demand for its aerospace components and systems. According to the company’s disclosures, supply limitations affecting a small fraction of its supplier base, roughly 2% of suppliers by one estimate, nonetheless constrained overall output growth and forced a shift in production mix toward lower-margin products, weighing on profitability even as top-line sales continued to grow.
The company’s Engines and Power Systems segment bore the brunt of the impact, with adjusted earnings before interest and taxes in that unit falling by $82 million, an amount that alone exceeded the company’s total net earnings decline of $71 million, according to a breakdown of the results. The company’s Control Systems segment partially offset that decline, contributing a $28 million improvement. Honeywell Aerospace also disclosed roughly $100 million in one-time charges tied to inventory adjustments and costs associated with its recent separation from Honeywell International, further weighing on reported profitability for the quarter.
Strong Demand Signals Amid the Weak Guidance
Despite the disappointing outlook, the company’s underlying demand picture remained notably strong. Honeywell Aerospace reported that its order backlog grew 9% to $18.15 billion during the quarter, while aftermarket sales, a key indicator of ongoing demand for maintenance, repair and overhaul services on existing aircraft and equipment, climbed 8%. That combination, robust demand paired with an inability to fully convert it into sales and earnings due to supply constraints, has been the central tension underlying the stock’s reaction, according to analysts who covered the results.
A Response Plan Already Underway
Honeywell Aerospace has outlined a series of steps aimed at addressing its supply chain challenges. According to the company, it is currently in the process of adding more than 50 new suppliers to its network, with an additional 50 suppliers targeted for onboarding later in the year. The company also said its spending on supplier tooling is expected to increase by roughly 20% compared with the first half of 2026, an investment intended to help expand production capacity and reduce the bottlenecks that weighed on the most recent quarter’s results.
Analysts React With Caution
Wall Street’s initial reaction to the results reflected broad concern about the near-term trajectory for the stock. One market strategist, commenting on the results, noted that aerospace stocks typically perform well on a pattern of beating expectations and raising guidance, rather than missing forecasts and cutting outlooks, suggesting Honeywell Aerospace could face a bumpy trading environment until its results demonstrate a clearer turnaround. Morgan Stanley had already lowered its price target on the stock to $235 from $255 in mid-July, ahead of Thursday’s results, reflecting some analyst caution heading into the report even before the scale of the guidance cut became clear.
Despite Thursday’s sharp decline, the stock’s average 12-month analyst price target remained well above its current trading level, with five analysts maintaining buy recommendations and none recommending a sell, according to available coverage, suggesting that at least some segment of Wall Street continues to view the pullback as a potential buying opportunity contingent on the company’s ability to resolve its supply chain issues over the coming quarters.
With Honeywell Aerospace now working through its plan to add new suppliers and increase tooling investment, investors are likely to closely watch upcoming quarterly updates for evidence that the company’s production constraints are beginning to ease. As a newly independent company navigating its first major guidance revision since separating from its former parent, Honeywell Aerospace’s ability to demonstrate a credible path back toward its original growth targets is expected to remain the central focus for investors through the remainder of 2026.
As Sainsbury agrees to sell Argos for £120m, we ask people if they still shop there, and what the new owners can do to compete with big online retailers like Amazon.
Business
SpaceX, Alphabet, Nvidia, Micron, AMD, Uber, CVS, Lilly, and More Stocks That Explain Today’s Market
SpaceX, Alphabet, Nvidia, Micron, AMD, Uber, CVS, Lilly, and More Stocks That Explain Today’s Market
I am a corporate finance professional with over ten years of experience in financial planning, capital budgeting, and risk assessment. As a long-term investor, I invest exclusively in funds and do not pick individual stocks. My approach is evidence-based: low costs, broad diversification, strategic asset allocation, and patience through market cycles. My motivation for writing is twofold: first, to help other long-term investors, especially women and those new to fund investing. I focus on what truly drives returns: costs, diversification, and time in the market. Second, to bring rigorous, data-driven fund analysis to a platform often dominated by single-stock commentary. I write to learn, share, and build a community of patient investors who value sleeping well at night over chasing short-term gains.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
V.F. Corporation: The Vans Drag Needs To Be Fixed
SHANGHAI — Shares of CXMT Corp fell 4.31% on Thursday, closing at 51.96 yuan after a session of steady selling that extended a pullback from the stock’s dramatic post-listing gains. The decline of 2.34 yuan came as investors continued to digest the memory chipmaker’s blockbuster initial public offering and the competitive realities of the global DRAM market.
Trading on the Shanghai Stock Exchange’s STAR Market under the ticker 688825, the stock opened near 52.90 yuan and ranged between 51.13 yuan and 53.23 yuan before settling lower. Volume remained elevated, reflecting ongoing interest in one of China’s most closely watched new listings. The move followed a 1.27% drop the previous session and continued a pattern of volatility after the shares more than quintupled from their IPO price in late July.
CXMT, formally known as ChangXin Memory Technologies, debuted on July 27 with an offering price of 8.66 yuan. Shares opened at 49.50 yuan, surged as high as 55.03 yuan and closed the first day at 49 yuan, a gain of roughly 466%. That performance briefly lifted the company’s market capitalization above 3.2 trillion yuan and made it the largest company by value on mainland China’s exchanges, overtaking long-time leader Industrial and Commercial Bank of China.
The IPO raised approximately 57.9 billion yuan, ranking as Asia’s largest listing of 2026 and the biggest semiconductor offering in STAR Market history. Only a small portion of shares, about 6.73% of the enlarged capital, was freely tradable at launch, contributing to sharp price swings. Subsequent sessions saw the stock climb further at times before profit-taking set in.
Company filings and market reports show strong recent operating momentum. First-quarter 2026 revenue reached 50.8 billion yuan, up more than 700% from a year earlier, with gross margin expanding to 79.16% and net profit attributable to shareholders of 24.76 billion yuan. Management has guided for first-half revenue of 110 billion to 120 billion yuan and net profit of 50 billion to 57 billion yuan, reflecting the sharp recovery in DRAM pricing driven by tight supply and robust demand from artificial intelligence applications.
CXMT ranks as the world’s fourth-largest DRAM producer by volume, behind Samsung Electronics, SK Hynix and Micron Technology. The company has expanded its customer base among Chinese technology firms and has begun supplying limited volumes of memory chips for budget notebooks sold by brands including HP, Asus and Acer outside the United States. Reports also indicate ongoing discussions with major domestic internet companies for server DRAM supply.
Despite the growth, technological and geopolitical constraints remain central to the investment debate. CXMT lacks access to extreme ultraviolet lithography tools under existing export controls, limiting its ability to advance to the most cutting-edge process nodes used by its Korean and U.S. rivals. Analysts have noted that this gap is particularly relevant for high-bandwidth memory used in advanced AI accelerators, an area where the company lags by several years.
Market attention this week also focused on reports that Apple’s efforts to secure more favorable pricing from CXMT for mobile DRAM products such as LPDDR5X encountered resistance. The Chinese manufacturer reportedly declined to undercut the pricing of Samsung and SK Hynix, underscoring a shift in bargaining power toward memory suppliers amid shortages. Separate coverage highlighted CXMT’s absence from the exhibitor list at the Flash Memory Summit in Santa Clara, where Samsung, SK Hynix and Micron showcased AI-related memory roadmaps.
Additional industry updates pointed to CXMT preparing limited production of LPDDR6 smartphone memory around the end of 2026, a step that would narrow the technology gap with global leaders. The company is also said to be evaluating plans for a second 12-inch DRAM fabrication plant in Beijing’s Yizhuang district as Chinese localities compete to attract semiconductor investment.
Thursday’s decline occurred against a backdrop of broader pressure on memory-related stocks and profit-taking after the exceptional first-week performance. Main force funds had recorded net outflows in the prior session, according to market data trackers. The stock’s free-float constraints and high valuation multiples relative to historical earnings continue to amplify daily moves.
CXMT’s prospectus had cautioned that the memory market could weaken if artificial intelligence investment slowed or if rivals expanded capacity aggressively. At the same time, the company has benefited from customers seeking to diversify supply chains away from traditional dominant suppliers. Its ability to maintain elevated margins while scaling advanced products will remain a key focus for investors in the coming quarters.
The shares remain substantially above the IPO price even after the latest retreat. Trading continues to attract significant retail and institutional attention given the company’s position as China’s leading domestic DRAM producer and the strategic importance of semiconductor self-reliance policies.
As the memory industry navigates a period of elevated prices and capacity constraints, CXMT’s performance will serve as a closely watched barometer of both China’s progress in advanced chip manufacturing and the durability of the current upcycle. Thursday’s session underscored that the transition from private to public company brings new scrutiny of valuation, technology roadmap and competitive positioning alongside the celebration of a record-breaking listing.
Business
Samvardhana Motherson shares rally over 7% after Q1 earnings; Motilal Oswal, Nomura weigh in
As per a regulatory filing on Thursday, revenue from operations rose 17% YoY to Rs 35,244 crore, driven by healthy performance across the company’s businesses. Profit after tax surged 70.1% YoY to Rs 1,032 crore, while EBITDA grew 26% YoY to Rs 3,104 crore.
The company also announced the acquisition of Chinese tech firm Shenzhen Autocruis for $22.6 million in this quarter, through the Motherson subsidiary SMR Automotive (Langfang) Co., and completed the acquisitions of the Wiring Harness business of Nexans Autoelectric and Yutaka Giken in July. Collectively, these two acquisitions are expected to contribute nearly $2 Billion of annualized revenue.
Also Read | Motherson Q1 profit jumps 102%, revenue hits record
Motilal Oswal remains bullish
Domestic brokerage firm Motilal Oswal reiterated a BUY rating on the stock, with a revised target price of Rs 178. “We expect Motherson to continue to outperform global automobile sales, fueled by rising premiumization and EV transition, a robust order backlog in autos and non-autos, and successful integration of recent acquisitions.” The brokerage stated in its note.
The current adverse global macro is likely to lead to industry consolidation, with players like Samvardhana Motherson International likely to emerge as key beneficiaries in the long run, according to the brokerage.
Over the years, the company has developed a well-diversified business model that focuses on its principle that no country, customer, or client should account for more than 10% of its revenue. This has helped the company achieve steady growth regardless of the end-market demand environment, as per the brokerage’s note.It is emerging as one of the major beneficiaries of the rising premiumization trend and EV transition, which in turn should drive higher content going forward. The closure of recent acquisitions provides huge growth opportunities as well, as these entities offer multiple synergy benefits, which include the company’s entry into the Japanese supplier network (Yachio + Ichikoh), evolution as a cockpit assembler (SAS), complementary new segment addition (Yachio + Dr. Schneider), and strong opportunities in aerospace and medical equipment.
Nomura sets target price of Rs 171
Domestic brokerage firm Nomura retains a BUY rating on Samvardhana Motherson International, with a target price of Rs 171, implying an upside of over 10%.
Our FY27F/28F/29F revenue growth is 11%/12%/18% above consensus, driven by the ramp-up of greenfield plants and strong growth in non-auto segments led by consumer electronics. The brokerage expects sustained margin improvement with operating leverage. With 6-7% free cash flow yields (FY28F/29F), further potential exists for acquisition-driven growth, it stated.
Management continues to work with customers to pass through higher input costs while driving cost optimisation initiatives, the brokerage stated in its report, as copper prices increased 4% QoQ and are up ~40% YoY, creating input cost pressures. These costs are typically passed on to customers with a 1-2 month lag, while overall commodity pass-through mechanisms generally
operate with a 3-6 month lag. Freight costs remained elevated, with the World Container Index up 40% YoY and 83% QoQ, resulting in additional logistics costs to ensure timely deliveries.
Any material import tax in US geography could impact Motherson’s key clients (e.g., Audi) and affect Motherson’s order book, which could be a key risk to achieving the target price. as per Nomura’s report.
Lanxess falls 3% as weak Q3 outlook overshadows Q2 EBITDA beat
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Shares of Ronan, Mt.-based innovator AirJoule were aloft like vapor Wednesday as the company’s recent deal with GE Vernova worked through the stock market ether. The company develops products that harvest water from the air in order to cool AI data-center servers. AirJoule (AIRJ), a joint-venture partner with data center gas turbine supplier GE Vernova (GEV) since March 2024, has…
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