Jim Cramer Dumps Honeywell Aerospace (HONA) After Shock Guidance Cut Triggers Sharp Selloff

Jim Cramer Dumps Honeywell Aerospace (HONA) After Shock Guidance Cut Triggers Sharp Selloff

Syeda Seirut Javed

Mon, August 10, 2026 at 8:15 PM GMT+3 3 min read

• HONA -3.79%

During the August 6 episode of Mad Money, a caller asked host Jim Cramer about Honeywell Aerospace Inc. (NASDAQ:HONA) following a steep, near 28% collapse in the stock between August 4 and August 6. Cramer revealed that the Charitable Trust immediately unloaded the position at the opening bell. He stated:

It really hurt us. Both Phil LeBeau and I were stunned. Phil said three times that they could've told us that things were bad. I called the management, and I said, management called me back, and said, look, I said, listen, I think it's a very suboptimal situation.

I really don't like the situation. I think that the company should have been much more forthcoming. I think it was a rookie mistake. We sold the stock at the opening for the Charitable Trust. It is a great company, but man, they are not ready for prime time, and it was very disappointing.

A Stunned Wall Street and a Brutal Post-Earnings Drop

The sudden plunge caught institutional investors and analysts off guard, landing the newly minted standalone company in Wall Street's penalty box. Honeywell Aerospace Inc. (NASDAQ:HONA) watched its shares implode after management slashed its full-year outlook following the second-quarter results.

The core catalyst behind the selloff was a severe downgrade to the corporate financial roadmap. Management aligned full-year forecasts with supply-chain capabilities, scaling back expectations across some major financial metrics. Organic growth guidance was reduced to a range of 4% to 5%, compared to previous guidance of 7% to 9%. Pro forma standalone adjusted EBIT was lowered to a range of $4.35 billion to $4.45 billion, down from earlier projections of $4.65 billion to $4.75 billion. In addition, year-over-year adjusted EBIT growth was revised to a range of flat to 3%, down from prior guidance of 7% to 10%. Persistent supply-chain constraints forced the company to prioritize original equipment manufacturer deliveries to major planemakers like Boeing and Airbus. As a result, production was diverted away from higher-revenue, higher-margin aftermarket operations, squeezing profitability right out of the gate as an independent entity.

For the second quarter, Honeywell Aerospace Inc. (NASDAQ:HONA) posted revenue of $4.52 billion, representing a 5% year-over-year increase. However, adjusted earnings came in at $1.87 per share, missing consensus estimates. The numbers were further weighed down by roughly $100 million in separation-related costs and inventory obsolescence charges tied to newly minted independence, contributing to a 7% decline in core profit.

Execution Risks Overshadow Cheaper Valuations

Even though the sharp selloff leaves Honeywell Aerospace Inc. (NASDAQ:HONA) trading at lower valuations (approximately 21x forward earnings) along with a short interest of float of roughly 2.6%, analysts warn that a cheap stock price does not make it a safe buy right away. Wall Street reacted quickly to the chaos, with Jefferies dropping its price target to $175 compared to an earlier $235 target, while keeping a Hold rating. The firm pointed out that nobody could have predicted such a major guidance cut during the company's very first quarter as a public business. The firm also noted that this rocky start creates serious doubts about whether the company can hit its big goals for 2030. Fixing supply chains and winning back trust will take time, meaning the stock lacks a quick spark to push it higher. As Cramer's quick exit shows, trying to hide bad news and stumbling right out of the gate can easily overshadow a company's long-term promise.

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