L3Harris Technologies (LHX) AI Stock Analysis

• Market Cap: $40.40B
• Dividend Yield: 2.17%
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 25.6
• Beta (1Y): 0.64
• Revenue Growth: 5.39%
• EPS Growth: 36.86%
• Country: US
• Employees: 47,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 8.44
• Shares Outstanding: 186,945,630
• 10 Day Avg. Volume: 1,719,184
• 30 Day Avg. Volume: 1,518,595
• PEG Ratio: 0.70
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.84
• Price to Cash Flow (P/CF): 8.70
• P/FCF Ratio: 9.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $249.27
• Price Target Upside: 15.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

L3Harris Technologies shows strong financial performance with robust profitability and efficient cash flow management. Technical analysis indicates a moderately positive trend, while valuation suggests potential overvaluation. Earnings call highlights strong demand and partnerships but also points to challenges such as cash flow outflow and budget constraints. Overall, the stock is supported by solid financials and growth potential but faces valuation and sector-specific risks.

Positive Factors

Cash Management

A significant portion of free cash flow was returned to shareholders through dividends and share buybacks, reflecting strong cash management.

Defense Technology Strategy

LHX's broader open architecture is likely more amenable to partnering and adapting, which presents more opportunities in the defense technology sector.

Stock Buybacks

Proceeds from the sale of Commercial Aviation Solutions are expected to re-accelerate stock repurchases, with a baseline of $1 billion planned.

Negative Factors

Market Concerns

The announcement that Anduril would take over management of IVAS has raised market concerns about potential pressures on larger defense contractors like LHX.

Operating Margins

Segment operating margins are expected to decline, particularly for Aerojet, due to productivity issues.

Revenue Impact

The sale of Commercial Aviation Solutions is expected to remove $480 million from L3Harris Technologies' revenue estimates.

L3Harris Technologies Business Overview & Revenue Model

Company Description

L3Harris 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 Money

L3Harris 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 demonstrates robust financial health with strong profitability metrics and stable growth. A solid gross profit margin of 25.1% and net profit margin of 7.9% indicate efficient operations. The balance sheet is stable with low leverage and moderate ROE. Cash flows are strong, reflecting efficient profit conversion.

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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 216.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 216.08 is above the 20-day moving average (MA) of 213.01, above the 50-day MA of 209.37, and below the 200-day MA of 224.16, indicating a neutral trend. The MACD of 1.95 indicates Negative momentum. The RSI at 54.38 is Neutral, neither overbought nor oversold. The STOCH value of 50.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LHX.

L3Harris Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	80 Outperform	$73.00B	18.86	18.23%	2.09%	14.11%	17.65%
LMT	79 Outperform	$111.91B	20.63	82.55%	2.70%	3.12%	-15.29%
AXON	78 Outperform	$46.26B	126.35	19.10%	―	33.32%	111.64%
NOC	73 Outperform	$68.11B	18.23	25.41%	1.74%	0.61%	77.28%
LHX	72 Outperform	$40.40B	25.63	8.49%	2.17%	5.39%	36.86%
TDG	64 Neutral	$77.29B	48.62	-29.16%	―	16.89%	20.33%
Sector *	63 Neutral	$4.27B	11.40	5.38%	214.63%	4.11%	-8.98%

L3Harris Technologies Corporate Events

L3Harris Technologies Secures New Credit Facilities

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.