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L3Harris Technologies (LHX)
NYSE:LHX
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L3Harris Technologies
(NYSE:LHX)71Outperform
Positive Factors
Cost Management
The company beat their gross cost savings target by 2x, reaching $800 million and now expects to achieve $1.2 billion of cumulative cost savings ahead of initial goals.
Revenue Potential
The total backlog for L3Harris Technologies grew by 5%, indicating strong future revenue potential.
Negative Factors
Global Market Challenges
The percentage of revenue from international sales decreased slightly, which may suggest challenges in global market expansion.
L3Harris Technologies (LHX) vs. S&P 500 (SPY)
Market Cap
$39.11B
Dividend Yield2.23%
Average Volume (3M)1.45M
Price to Earnings (P/E)26.4
Beta (1Y)0.76
Revenue Growth9.82%
EPS Growth22.33%
CountryUS
Employees47,000
SectorIndustrials
Sector Strength66
IndustryAerospace & Defense
Share Statistics
EPS (TTM)7.88
Shares Outstanding188,313,840
10 Day Avg. Volume1,472,262
30 Day Avg. Volume1,447,913
Financial Highlights & Ratios
PEG Ratio1.18
Price to Book (P/B)N/A
Price to Sales (P/S)1.83
Price to Cash Flow (P/CF)8.70
P/FCF Ratio9.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$256.00Price Target Upside23.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
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 Financial Statement Overview
Summary
L3Harris Technologies shows strong financial performance with consistent revenue growth and solid profitability. Low financial leverage and effective equity utilization add stability. However, slight operational efficiency pressures and room for improvement in cash flow alignment are noted.Income Statement
L3Harris Technologies demonstrates strong and consistent revenue growth, with a notable increase of 9.81% from 2023 to 2024. The company maintains a solid gross profit margin and has improved its net profit margin over the years, reflecting effective cost management and operational efficiency. However, a slight decrease in EBIT margin indicates some pressure on operating efficiency despite overall profitability.85
Very Positive
Balance Sheet
The balance sheet shows a stable equity base with a Debt-to-Equity ratio of 0.06, indicating low financial leverage and a strong equity position. The Return on Equity is robust, showing the company's effective use of equity capital to generate profits. However, there is a slight decline in the equity ratio, suggesting a need to monitor the balance between liabilities and assets.80
Positive
Cash Flow
The cash flow statement reflects healthy operating cash flow with a strong Free Cash Flow growth rate of 30.54% from 2023 to 2024. The Operating Cash Flow to Net Income ratio is favorable, indicating efficient cash generation relative to net income. Nonetheless, the Free Cash Flow to Net Income ratio suggests room for improvement in aligning cash flow with reported earnings.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 |
| 1.16B | 13.95B | 7.79B | 7.83B | 7.69B | Net Debt |
| 540.00M | 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
Neutral
207.08
Price Trends
209.17
Negative
226.35
Negative
226.59
Negative
Market Momentum
-1.86
Negative
51.71
Neutral
84.55
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LHX, the sentiment is Neutral. The current price of 207.08 is above the 20-day moving average (MA) of 203.22, below the 50-day MA of 209.17, and below the 200-day MA of 226.59, indicating a neutral trend. The MACD of -1.86 indicates Negative momentum. The RSI at 51.71 is Neutral, neither overbought nor oversold. The STOCH value of 84.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $67.14B | 16.37 | 27.30% | 1.70% | 4.44% | 110.33% | |
77 Outperform | $171.44B | 36.22 | 7.94% | 1.88% | 17.15% | 58.66% | |
75 Outperform | $68.68B | 18.64 | 17.14% | 2.23% | 12.88% | 13.78% | |
74 Outperform | $105.65B | 20.12 | 84.26% | 2.82% | 5.14% | -19.14% | |
71 Outperform | $39.11B | 26.37 | 7.70% | 2.23% | 9.82% | 22.33% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
50 Neutral | $130.99B | ― | -162.23% | ― | -14.49% | -399.90% |
* Industrials Sector Average
Performance Comparison
LHX
L3Harris Technologies
207.08
-2.47
-1.18%
BA
Boeing
158.90
-42.24
-21.00%
GD
General Dynamics
250.80
-17.38
-6.48%
LMT
Lockheed Martin
448.82
27.88
6.62%
NOC
Northrop Grumman
463.83
13.32
2.96%
RTX
RTX
128.70
40.57
46.03%
L3Harris Technologies Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -2.30% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong performance with record revenue and significant program wins, supported by effective cost-saving measures. However, challenges remain in specific segments, particularly space, and uncertainty around international aid programs.Highlights
Record Revenue and Backlog
L3Harris achieved record revenue of $21.3 billion for 2024, growing 10% year-over-year, with a record backlog positioning the company well for the future.
Significant Program Wins
Notable achievements include winning the Next-Gen Jammer competition and a $1 billion IDIQ award for resilient communications for the U.S. Navy.
LHX NeXt Cost Savings
The LHX NeXt initiative exceeded its cost savings target, achieving $800 million in 2024, with expectations of $1.2 billion by the end of 2025, driving margin expansion.
Strong Free Cash Flow
Free cash flow grew to $2.3 billion in 2024, representing a 14% increase driven by earnings growth and effective working capital management.
Lowlights
Space Segment Challenges
The SAS segment saw revenue decline by 4% year-over-year due to the divestiture of the antenna business and challenges in fixed-price development programs in space.
Ukraine Aid Uncertainty
There is uncertainty regarding continued U.S. government assistance to Ukraine, potentially affecting tens of millions of dollars in backlog.
Fixed Price Development Program Risks
Legacy fixed price development programs, particularly in space, have posed challenges with negative adjustments totaling about $100 million in 2024.
Company Guidance
In the earnings call for the fourth quarter of 2024, L3Harris Technologies provided detailed guidance for 2025, projecting revenue between $21.8 billion and $22.2 billion, which represents an organic growth of 4% at the midpoint. Segment operating margin is expected to be in the mid to high 15% range, supported by cost savings from the LHX NeXt initiative and strong program execution. Free cash flow is anticipated to be between $2.4 billion and $2.5 billion. The company also outlined its expectation for non-GAAP EPS to be in the range of $10.55 to $10.85, reflecting a 10% growth at the midpoint. At the segment level, SAS revenue is projected to be $6.9 billion to $7.1 billion, IMS revenue is anticipated at $7 billion to $7.2 billion, CS revenue is expected to be $5.6 billion to $5.7 billion, and Aerojet Rocketdyne is forecasted to reach approximately $2.5 billion. Additionally, the company aims to repurchase at least $1 billion of shares in 2025 and plans to transfer approximately $1.2 billion in pension assets and liabilities to a third party by the end of the first quarter of 2025.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.