Why Did Honeywell Aerospace Stock Drop on Thursday?

Honeywell Aerospace stock plummeted 10.5% despite beating Q3 earnings expectations, earning $2.21 per share versus forecasted $1.86. The sell-off was driven by disappointing growth metrics: sales grew only 2% year-over-year and net profit just 1%. While the company's commercial original equipment division grew 7%, it remains the smallest segment. Larger divisions—commercial aftermarket and defense/space—grew only 2% and 1% respectively. At a 20x free cash flow valuation, investors are concerned the company needs faster growth to justify its premium pricing.