Summary
- L3Harris Technologies (LHX) remains a Buy, with a new 12% upside target to $325 driven by robust Q3 results and upgraded forecasts.
- Geop…
Summary
- L3Harris Technologies (LHX) remains a Buy, with a new 12% upside target to $325 driven by robust Q3 results and upgraded forecasts.
- Geopolitical tensions and rising global defense budgets underpin strong order growth, a $36B backlog, and continued margin expansion across LHX’s segments.
- Operational improvements via the LHX NeXt program and disciplined capital allocation support sustained margin gains, deleveraging, and growing shareholder payouts.
- Valuation remains attractive despite premium multiples, as market expectations are justified by durable demand and improving free cash flow yields.
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Investment Thesis.
I remain bullish on L3Harris Technologies (LHX) shares despite the fact that the shares reached the target price I set in less than six months. In early June, I predicted
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Quick Insights
Upgraded revenue and margin forecasts, a robust $36B order backlog, and continued demand from geopolitical tensions support a fair value estimate of $325 per share.
LHX is reducing net debt (Net Debt/EBITDA down to 2.93x), increasing dividends (23 years of growth), and accelerating buybacks, enabled by strong free cash flow generation.
Key risks include potential reductions in defense spending, high competition for contracts, and execution risks on large projects that could pressure revenue or margins.