Honeywell Aerospace stock plunged after the company reported its -- very weak -- initial quarter following its separation from Honeywell Technologies in June.

Shares of the aerospace and defense supplier were down 13% at $177 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.3%, respectively.

Late Wednesday, Honeywell Aerospace reported second-quarter sales of $4.5 billion, up 5% year over year, and operating profit of $1 billion. Wall Street was looking for $4.6 billion in sales and $1.1 billion in operating profit.

Operating profit fell 7% year over year, partly due to inventory obsolescence charges. Investors don't see those every day.

Wall Street and investors had some idea of how the quarter would go after Honeywell Technologies reported earnings. That quarterly report still included the aerospace business. What investors weren't ready for was guidance.

Honeywell Aerospace expects sales growth of 4% to 5%, down from a prior expectation of 7% to 9%. Operating profit in 2026 will be about $4.4 billion, down from a prior expectation of $4.7 billion. Wall Street was projecting operating profit of about $4.6 billion before the earnings report.

"After a tough 1Q, during which Honeywell Aerospace's core sales growth lagged Aerospace & Defense peers by a wide margin across all three end-markets (commercial aftermarket, commercial OE, and defense), 2Q wasn't much better," wrote Melius Research analyst Scott Mikus on Wednesday. "The acute supply chain issue from last quarter did not improve as much as management had hoped."

Honeywell Aerospace reported 8% growth in commercial aftermarket sales, he added. Peers reported 23% growth.

"It's no secret that Honeywell Aerospace has been a source of frustration for its customers, and the company's $2 billion-plus of overdue backlog continues to grow," added Mikus. "Further, coming out of Covid, airlines have turned to repairs and PMA parts (akin to generic drugs in aerospace) to reduce maintenance costs and alleviate spare parts shortages. If [the company] can't resolve its supply chain issues and improve on-time delivery, it risks losing a portion of its future high-margin aftermarket revenue stream."

"While it is good that Honeywell Aerospace recognizes that it has problems, fixing them will not be an overnight affair," wrote Vertical Research Partners analyst Rob Stallard. "While the company has a broadly diversified revenue mix, it has relatively less exposure to attractive Aerospace & Defense sub-sectors like large commercial engines or missiles than other companies. Put together, we see Honeywell's growth continuing to lag its peers. While the valuation is relatively inexpensive, we fear that this could be a value trap."

Shares are trading for about 23 times expected 2026 earnings. GE Aerospace trades for 48 times. GE Aerospace, of course, grew second-quarter operating profit 18% year over year and raised full-year financial guidance in July.

Honeywell Aerospace won't get a better multiple, however, until growth and execution improve.