L3Harris Technologies (LHX) AI Stock Analysis

• Market Cap: $67.44B
• Dividend Yield: 1.61%
• Average Volume (3M): 1.35M
• Price to Earnings (P/E): 38.7
• Beta (1Y): 0.45
• Revenue Growth: 2.83%
• EPS Growth: 47.00%
• Country: US
• Employees: 47,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 2.86
• Shares Outstanding: 187,052,840
• 10 Day Avg. Volume: 1,524,776
• 30 Day Avg. Volume: 1,348,418
• PEG Ratio: 1.19
• Price to Book (P/B): 2.04
• Price to Sales (P/S): 1.87
• P/FCF Ratio: 18.51
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 3.59
• Enterprise Value/Gross Profit: 15.54
• Enterprise Value/Ebitda: 20.08
• 1Y Price Target: $367.31
• Price Target Upside: 1.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $404.00 ▲(12.13% Upside)

The score is driven by strong technical momentum and a constructive earnings outlook (raised revenue guidance, book-to-bill above 1, and Aerojet Rocketdyne backlog strength). Financial performance is solid but held back by declining free cash flow growth, while valuation is the primary drag due to the elevated P/E despite a modest dividend yield.

Positive Factors

Increased 2025 Revenue Guidance

Raised full-year revenue guidance to $22B signals durable contract-driven growth tied to defense priorities. Higher guidance reflects multi-year program wins and improved demand visibility, supporting sustained investment capacity and strategic positioning over the next several years.

High Book-to-Bill and Order Intake

A book-to-bill above 1 with $6.6B in orders provides multi-quarter revenue visibility and backlog conversion potential. Strong bookings reduce sales cyclicality, underpin production planning and margins, and de-risk near-term revenue relative to peers with thinner order books.

Aerojet Rocketdyne Backlog Strength

Record $8.3B propulsion backlog and 15% organic growth indicate sustained demand for missile and space propulsion. This specialized, high-barrier business supports durable revenue, scale benefits, and strategic relevance as nations expand missile and space programs internationally.

Negative Factors

Declining Free Cash Flow Growth

A 12.7% decline in FCF growth signals weakening cash conversion that can constrain capital allocation. With operating cash flow to net income at 0.34, persistent FCF deterioration could limit investments, dividends or M&A capacity and pressure liquidity over multiple quarters.

Exposure to Government Funding Timing

Heavy reliance on government contracts creates structural timing and funding risk; shutdowns and delayed appropriations can push award decisions and payments months later. Such volatility undermines cash flow predictability and complicates long-term program execution and planning.

Moderate Leverage

Debt-to-equity of 0.61 denotes moderate leverage that, while manageable, reduces financial flexibility versus lower-debt peers. Interest and refinancing sensitivity may constrain opportunistic capex or acquisitions and increases the importance of steady cash generation to sustain capital allocation plans.

L3Harris Technologies Business Overview & Revenue Model

Company Description

L3Harris Technologies, Inc., an aerospace and defense technology company, provides mission-critical solutions for government and commercial customers worldwide. The company's Integrated Mission Systems segment provides multi-mission intelligence, surveillance, and reconnaissance (ISR) systems; and communication systems, as well as fleet management support, sensor development, modification, and periodic depot maintenance services for ISR and airborne missions. It also manufactures and integrates mission systems for maritime platforms, such as signals intelligence and multi-intelligence platforms; unmanned surface and undersea autonomous solutions; and power and ship control systems and other electronic and electrical products and systems. In addition, this segment offers advanced electro-optical and infrared solutions. Its Space and Airborne Systems segment offers space payloads, sensors, and full-mission solutions; classified intelligence and cyber defense solutions; mission avionics; and electronic warfare systems. The company's Communication Systems segment provides tactical communications; broadband secured mobile networked communication equipment, including airborne, space, and surface data link terminals, ground stations, and transportable tactical satellite communication (SATCOM) systems for use in manned aircraft, unmanned aerial vehicles, and naval ships; and helmet and weapon mounted integrated night vision systems. This segment also offers radios, systems applications, and equipment for critical public safety and professional communications; and SATCOM terminals and battlefield management networks. Its Aviation Systems segment offers defense aviation products; commercial pilot training; and mission networks solutions for air traffic management. The company was formerly known as Harris Corporation and changed its name to L3Harris Technologies, Inc. in June 2019. L3Harris Technologies, Inc. was founded in 1895 and is headquartered in Melbourne, Florida.

How the Company Makes Money

L3Harris generates revenue primarily through contracts with government and defense agencies, as well as commercial clients. Its revenue model is largely based on the sale of products, services, and solutions that cater to the aerospace and defense sectors. Key revenue streams include the provision of communication systems, electronic warfare technologies, and advanced avionics. The company also earns income from maintenance, repair, and overhaul (MRO) services, which support its systems throughout their lifecycle. Significant partnerships with the U.S. government and international defense organizations further bolster its revenue, as they often lead to multi-year contracts and long-term engagements. Additionally, L3Harris invests in research and development to innovate and expand its product offerings, thereby enhancing its competitive position and revenue potential.

L3Harris Technologies Financial Statement Overview

Summary

Solid overall fundamentals: steady TTM revenue growth (1.72%) and healthy profitability (gross margin 23.13%, EBITDA margin 17.20%). Balance sheet leverage is moderate (debt-to-equity 0.61) with decent ROE (9.08%). Main offset is weaker cash-flow trend, with TTM free cash flow growth down 12.71% despite adequate cash conversion (FCF to net income 0.83).

Income Statement

L3Harris Technologies shows a strong revenue growth rate of 1.72% TTM, indicating positive momentum. The gross profit margin of 23.13% and net profit margin of 8.09% reflect stable profitability, although slightly below industry leaders. EBIT and EBITDA margins are healthy at 11.50% and 17.20% respectively, showcasing efficient operations.

Balance Sheet

The company's debt-to-equity ratio of 0.61 TTM suggests moderate leverage, which is manageable but higher than some peers. Return on equity at 9.08% indicates decent profitability from shareholders' investments. The equity ratio of 47.61% shows a balanced capital structure, providing a stable financial foundation.

Cash Flow

Free cash flow growth has declined by 12.71% TTM, which could be a concern if it continues. However, the operating cash flow to net income ratio of 0.34 and free cash flow to net income ratio of 0.83 indicate that the company generates sufficient cash to cover its net income, maintaining operational stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.74B	21.32B	19.42B	17.06B	17.81B	18.19B
Gross Profit	5.03B	4.75B	4.43B	4.93B	5.38B	5.34B
EBITDA	3.89B	3.56B	2.93B	2.50B	3.52B	2.64B
Net Income	1.76B	1.50B	1.23B	1.06B	1.85B	1.12B
Balance Sheet
Total Assets	41.01B	42.00B	41.69B	33.52B	34.71B	36.96B
Cash, Cash Equivalents and Short-Term Investments	339.00M	615.00M	560.00M	880.00M	941.00M	1.28B
Total Debt	11.84B	12.98B	13.95B	7.79B	7.83B	7.69B
Total Liabilities	21.48B	22.42B	22.86B	14.90B	15.39B	16.12B
Stockholders Equity	19.53B	19.51B	18.77B	18.52B	19.21B	20.72B
Cash Flow
Free Cash Flow	1.89B	2.15B	1.65B	1.91B	2.35B	2.42B
Operating Cash Flow	2.27B	2.56B	2.10B	2.16B	2.69B	2.79B
Investing Cash Flow	425.00M	-263.00M	-7.02B	-250.00M	1.39B	751.00M
Financing Cash Flow	-2.89B	-2.22B	4.59B	-1.95B	-4.41B	-3.11B

L3Harris Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 360.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 360.3 is above the 20-day moving average (MA) of 333.90, above the 50-day MA of 304.06, and above the 200-day MA of 272.58, indicating a bullish trend. The MACD of 16.51 indicates Negative momentum. The RSI at 78.94 is Negative, neither overbought nor oversold. The STOCH value of 86.91 is Negative, 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
NOC	75 Outperform	$96.87B	23.34	26.17%	1.55%	-0.14%	72.35%
RTX	75 Outperform	$269.87B	40.58	10.74%	1.44%	8.79%	39.63%
LHX	74 Outperform	$67.44B	38.71	9.13%	1.61%	2.83%	47.00%
GD	74 Outperform	$99.03B	23.73	17.66%	1.73%	11.86%	17.39%
LMT	71 Outperform	$137.67B	33.21	62.78%	2.77%	2.88%	-35.15%
HII	69 Neutral	$16.59B	29.21	12.39%	1.53%	2.60%	-18.22%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

L3Harris Technologies Corporate Events

L3Harris Restructures Into Three Focused Defense Segments

Effective January 5, 2026, L3Harris Technologies reorganized its operating structure from four to three business segments—Space & Mission Systems, Communications & Spectrum Dominance, and Missile Solutions—in a move designed to better align its portfolio with evolving warfare requirements and the needs of defense customers. The reshuffle consolidates satellite, payload, maritime, special missions, resilient communications, electronic warfare, propulsion, hypersonics and advanced missile technologies into more focused units, with Sam Mehta, Jon Rambeau and Ken Bedingfield named segment leaders and Bedingfield retaining his role as CFO, while former Space & Airborne Systems president Edward Zoiss transitioned on January 2, 2026, to become Vice President of Engineering & Innovation; the company said it will detail the financial and reporting realignment under the new structure during its January 29 earnings call, signaling operational and strategic implications for how investors and other stakeholders assess its performance.

The most recent analyst rating on (LHX) stock is a Buy with a $367.00 price target. To see the full list of analyst forecasts on L3Harris Technologies stock, see the LHX Stock Forecast page.