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L3Harris Technologies (LHX)
NYSE:LHX
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L3Harris Technologies
(NYSE:LHX)
76Outperform
Positive Factors
Demand and Orders
LHX booked nearly $2 billion in orders in the first week of the second quarter, showcasing strong demand for its products.
Military Contracts
LHX capabilities in secure communications, space-based operations, and missile programs should continue to benefit from emphasis and investment by US and allied militaries.
Stock Repurchase Strategy
Proceeds from the sale of Commercial Aviation Solutions are expected to re-accelerate stock repurchases, with a baseline of $1 billion planned.
Negative Factors
Revenue Challenges
The company's 2025 revenue estimate has been lowered due to the impact of the CAS divestiture, indicating a challenging financial outlook.
Revenue Impact
The sale of Commercial Aviation Solutions is expected to remove $480 million from L3Harris Technologies' 2025 revenue estimates.
Segment Margins
Segment operating margins are expected to decline, particularly for Aerojet, due to productivity issues.
L3Harris Technologies (LHX) vs. S&P 500 (SPY)
Market Cap
$43.03B
Dividend Yield2.03%
Average Volume (3M)1.64M
Price to Earnings (P/E)27.3
Beta (1Y)0.65
Revenue Growth5.39%
EPS Growth36.86%
CountryUS
Employees47,000
SectorIndustrials
Sector Strength91
IndustryAerospace & Defense
Share Statistics
EPS (TTM)2.41
Shares Outstanding186,945,630
10 Day Avg. Volume1,278,921
30 Day Avg. Volume1,638,240
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)2.27
Price to Sales (P/S)0.00
P/FCF Ratio18.97
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit10.67
Enterprise Value/Ebitda3.59
Forecast
1Y Price Target
$248.38Price Target Upside7.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
L3Harris Technologies Business Overview & Revenue Model
Company DescriptionL3Harris Technologies (LHX) is a leading global aerospace and defense technology company that provides advanced defense and commercial technologies across air, land, sea, space, and cyber domains. The company operates in several sectors, including Integrated Mission Systems, Communication Systems, Space and Airborne Systems, and Aviation Systems. L3Harris is known for its innovative solutions in areas such as tactical communications, geospatial systems, air traffic management, avionics, and electronic warfare systems.
How the Company Makes MoneyL3Harris Technologies generates revenue primarily through the sale of its products and services to government and commercial customers worldwide. The company's revenue streams include contracts with the U.S. Department of Defense, international governments, and commercial clients. Significant revenue is derived from long-term contracts for integrated mission systems, such as intelligence, surveillance, and reconnaissance solutions, as well as command and control systems. The Communication Systems segment contributes through sales of tactical radios and broadband communication systems. The Space and Airborne Systems segment earns income from advanced sensors, payloads, and space-based technologies, while the Aviation Systems segment provides training, simulation, avionics, and air traffic management solutions. L3Harris also benefits from strategic partnerships and collaborations that enhance its technological capabilities and market reach.
L3Harris Technologies Key Performance Indicators (KPIs)
Any
Revenue by Segment
Highlights revenue from different business segments, revealing which areas drive growth and profitability, and indicating strategic focus or potential vulnerabilities.
Highlights revenue from different business segments, revealing which areas drive growth and profitability, and indicating strategic focus or potential vulnerabilities.
Data provided by:
Main Street Data
Main Street DataL3Harris Technologies Financial Statement Overview
Summary
L3Harris Technologies demonstrates strong financial health with robust profitability metrics and stable growth. A solid income statement with healthy margins, a stable balance sheet with low leverage, and strong cash flow conversion indicate efficient financial management. Overall, the financial performance suggests a resilient foundation for future growth.Income Statement
L3Harris Technologies shows a strong financial performance with a solid gross profit margin of 25.1% and a net profit margin of 7.9% for TTM (Trailing-Twelve-Months). The revenue growth rate from the previous fiscal year to TTM is approximately 9.4%, indicating robust growth. EBIT and EBITDA margins are healthy at 9.9% and 15.8%, respectively, reflecting efficient core operations.85
Very Positive
Balance Sheet
The company maintains a stable financial position with a debt-to-equity ratio of 0.067 for TTM, indicating low leverage. ROE stands at 8.8%, showcasing moderate profitability for shareholders. The equity ratio is 46.4%, highlighting a balanced capital structure with reasonable reliance on equity financing.72
Positive
Cash Flow
Cash flow metrics are strong, with a free cash flow growth rate of 5.5% from the previous fiscal year to TTM. The operating cash flow to net income ratio of 1.56 indicates adequate cash generation relative to net earnings. Similarly, the free cash flow to net income ratio is 1.35, suggesting efficient conversion of profits into cash.78
Positive
| Breakdown | ||||
| Mar 2025 | Dec 2023 | Dec 2022 | Dec 2021 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 21.32B | 19.42B | 17.06B | 17.81B | 18.19B | Gross Profit |
| 5.52B | 5.11B | 4.93B | 5.38B | 5.31B | EBIT |
| 1.92B | 1.43B | 2.37B | 2.56B | 2.39B | EBITDA |
| 3.56B | 2.93B | 2.50B | 3.52B | 2.64B | Net Income Common Stockholders |
| 1.50B | 1.23B | 1.06B | 1.85B | 1.12B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 615.00M | 560.00M | 880.00M | 941.00M | 1.28B | Total Assets |
| 42.00B | 41.69B | 33.52B | 34.71B | 36.96B | Total Debt |
| 12.24B | 13.95B | 7.79B | 7.83B | 7.69B | Net Debt |
| 11.62B | 13.39B | 6.91B | 6.89B | 6.41B | Total Liabilities |
| 22.42B | 22.86B | 14.90B | 15.39B | 16.12B | Stockholders Equity |
| 19.51B | 18.77B | 18.52B | 19.21B | 20.72B |
| Cash Flow | Free Cash Flow | |||
| 2.15B | 1.65B | 1.91B | 2.35B | 2.42B | Operating Cash Flow |
| 2.56B | 2.10B | 2.16B | 2.69B | 2.79B | Investing Cash Flow |
| -263.00M | -7.02B | -250.00M | 1.39B | 751.00M | Financing Cash Flow |
| -2.22B | 4.59B | -1.95B | -4.41B | -3.11B |
L3Harris Technologies Technical Analysis
Positive
230.20
Price Trends
214.98
Positive
211.51
Positive
223.37
Positive
Market Momentum
2.77
Negative
71.80
Negative
79.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LHX, the sentiment is Positive. The current price of 230.2 is above the 20-day moving average (MA) of 219.11, above the 50-day MA of 214.98, and above the 200-day MA of 223.37, indicating a bullish trend. The MACD of 2.77 indicates Negative momentum. The RSI at 71.80 is Negative, neither overbought nor oversold. The STOCH value of 79.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LHX.
L3Harris Technologies Risk Analysis
L3Harris Technologies disclosed 28 risk factors in its most recent earnings report. L3Harris Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
L3Harris Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $75.34B | 19.48 | 18.23% | 2.05% | 14.11% | 17.65% | |
77 Outperform | $109.73B | 20.23 | 82.55% | 2.75% | 3.12% | -15.29% | |
76 Outperform | $43.03B | 27.28 | 8.49% | 2.03% | 5.39% | 36.86% | |
76 Outperform | $57.08B | 177.47 | 15.13% | ― | 32.48% | 24.29% | |
75 Outperform | $79.94B | 48.06 | -29.16% | ― | 14.90% | 17.50% | |
70 Outperform | $68.10B | 18.62 | 25.41% | 1.74% | 0.61% | 77.28% | |
64 Neutral | $4.43B | 12.01 | 5.16% | 249.23% | 4.03% | -11.73% |
* Industrials Sector Average
Performance Comparison
LHX
L3Harris Technologies
230.20
11.08
5.06%
GD
General Dynamics
280.71
-13.39
-4.55%
LMT
Lockheed Martin
468.32
13.18
2.90%
NOC
Northrop
473.17
12.16
2.64%
AXON
Axon Enterprise
733.18
441.15
151.06%
TDG
Transdigm Group
1,423.17
179.79
14.46%
L3Harris Technologies Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 6.42%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong international demand and strategic partnerships driving growth, alongside solid financial performance and margin expansion. However, challenges in the SAS segment, a free cash flow outflow, and budget constraints posed concerns. Despite these challenges, the overall sentiment was buoyant, with a focus on long-term growth and profitability.Q1-2025 Updates
Positive Updates
Strong International Demand and Key Contract Wins
L3Harris secured a $1.1 billion contract with the Dutch Ministry of Defense for network modernization and software-defined radios. The company reported strong international demand, contributing to a 4% revenue growth in CES segment.
Positive Financial Performance in Q1 2025
Revenue was $5.1 billion, with a segment operating margin of 15.6%, marking the sixth consecutive quarter of year-over-year margin expansion. Non-GAAP EPS was $2.41, up 7% year-over-year.
Strategic Partnerships and Innovations
Announced new partnerships with Kuiper Government Solutions and Shield AI to enhance tactical communication and AI-enabled unmanned systems capabilities.
Continued Focus on Profitability
Maintained segment operating margin guidance of mid to high 15% for 2025 despite divestitures, supported by LHX NEXT cost savings and strong program execution.
Negative Updates
Challenges in SAS Segment
SAS revenue was down 6% organically, primarily due to lower volumes associated with program timing and reduced F-35 volume as TR3 mission computing hardware transitions from development to production.
Free Cash Flow Outflow
Free cash was an outflow of about $70 million in Q1 2025, although this was less than half the outflow seen in Q1 2024.
Potential Impact of Government Budget Constraints
Space sector faced government fiscal year 2025 budget constraints, expected to abate by 2026, impacting revenue growth in the short term.
Company Guidance
During the first quarter 2025 earnings call for L3Harris Technologies, the company updated its guidance for the year while expressing confidence in achieving its 2026 financial framework of $23 billion in revenue, low 16% margins, and $2.8 billion in free cash flow. The company reported a first-quarter revenue of $5.1 billion with a segment operating margin of 15.6% and a non-GAAP EPS of $2.41, reflecting a 7% year-over-year increase. Despite a free cash outflow of about $70 million due to the short quarter, L3Harris reiterated its 2025 free cash flow guidance of $2.4 to $2.5 billion. The guidance was adjusted to account for the commercial aviation solutions divestiture, with expected revenue now between $21.4 to $21.7 billion, representing a 4% organic growth at the midpoint. The company's operational performance and capital deployment actions, including a $1.2 billion pension obligation transfer, were highlighted as contributing factors to maintaining strong financial projections.L3Harris Technologies Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
L3Harris Technologies Secures New Credit Facilities
Neutral
Feb 21, 2025
On February 18, 2025, L3Harris Technologies announced the establishment of a new $2.5 billion five-year senior unsecured revolving credit facility, replacing a previous $2 billion facility. This move enhances L3Harris’ financial flexibility, allowing it to borrow, prepay, and re-borrow funds, with certain subsidiaries designated as borrowers. Concurrently, L3Harris set up a new $500 million 364-day credit facility, replacing a prior $1.5 billion facility. These developments demonstrate L3Harris’ strategic financial adjustments to support its operations and maintain favorable terms based on its senior debt ratings.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.