L3Harris Technologies
LHX
$278.38
-4.61%
L3Harris Technologies is a global aerospace and defense technology company that provides advanced communication systems, space and airborne systems, and integrated mission solutions for military and government customers. As one of the top-tier U.S. defense primes, it holds a distinct competitive position through its portfolio of mission-critical technologies, including uncrewed aerial vehicles, sensors, and space-based systems. The current investor narrative centers on the company's ability to capitalize on rising global defense budgets and geopolitical tensions, particularly the U.S. government's push to quadruple production of advanced weaponry, while also navigating supply chain constraints and margin pressures. Recent headlines highlight L3Harris as a beneficiary of defense supply gaps exposed by Iran tensions, but also underscore the need to balance growth opportunities with execution risks.…
LHX
L3Harris Technologies
$278.38
Related headlines
Investment Opinion: Should I buy LHX Today?
Based on the analysis, I rate L3Harris as a Hold. The consensus rating is Buy with an average target of $343.27, implying 17.6% upside, but the stock's technical weakness and margin pressures warrant caution. The thesis is that the company is well-positioned to benefit from defense spending growth, but execution risks and valuation concerns limit upside potential.
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LHX 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The company has strong revenue growth and a favorable defense spending environment, but margin compression and technical weakness create uncertainty. The stock is fairly valued on forward earnings, but the high trailing PE suggests the market expects significant earnings growth. If the company can demonstrate margin stabilization and continued revenue growth, the stance could be upgraded to bullish. Conversely, if margins deteriorate further or growth decelerates, the stance would be downgraded to bearish. Key factors to monitor include quarterly earnings, margin trends, and geopolitical developments.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on L3Harris Technologies's 12-month outlook, with a consensus price target around $343.27 and implied upside of +23.3% versus the current price.
Average Target
$343.27
0 analysts
Implied Upside
+23.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$285 - $393
Analyst target range
The target price range spans from a low of $285.00 to a high of $393.00, representing a wide spread of 38% between the low and high targets. The high target of $393 assumes that L3Harris will successfully capitalize on the defense spending supercycle, with accelerating revenue growth and margin expansion driven by increased production of advanced weaponry and space systems. The low target of $285 suggests that the stock could face further downside if geopolitical tensions de-escalate, supply chain issues persist, or the company fails to meet its margin improvement targets. The wide range indicates elevated uncertainty among analysts, but the recent upgrades and the consensus Buy rating suggest that the overall bias is positive, with the average target implying a solid upside.
Bulls vs Bears: LHX Investment Factors
L3Harris presents a mixed picture: strong revenue growth and a favorable defense spending environment are offset by margin compression and a weak technical trend. The bull case is supported by accelerating revenue (11.9% YoY) and a consensus Buy rating with 17.6% upside to the average target. However, the bear case highlights margin pressure (gross margin down 190 bps) and a stock that has underperformed the market significantly (relative strength -29.4% over 6 months). The most critical tension is whether the company can convert its record backlogs into margin expansion and earnings growth, as the market is pricing in a significant recovery (forward PE 21.7x vs trailing 35.5x). If margins stabilize and revenue growth continues, the stock could re-rate higher; if not, it may drift toward the low target. Currently, the bull case has slightly stronger evidence given the fundamental tailwinds, but technical weakness warrants caution.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue grew 11.9% YoY to $5.744B, up from 5.4% growth in Q1 2025, indicating strong demand across defense segments. This acceleration is driven by record backlogs and increased defense spending, particularly in Space and Airborne Systems.
- Defense Spending Supercycle: Geopolitical tensions, especially with Iran, have led to commitments to quadruple production of advanced weaponry, directly benefiting L3Harris. The company is positioned as a key supplier of mission-critical technologies, with recent news highlighting its role in filling defense supply gaps.
- Analyst Consensus Buy: With 11 analysts, the consensus rating is 'Buy' with an average target price of $343.27, implying ~17.6% upside from the current price of $291.82. The high target of $393 suggests even greater potential if the company executes on its growth plans.
- Strong Free Cash Flow: TTM free cash flow stands at $2.589B, providing ample liquidity for debt reduction, dividends, and strategic investments. This financial flexibility supports the company's ability to fund growth initiatives and return capital to shareholders.
Bearish
- Margin Compression: Gross margin contracted to 24.4% in Q1 2026 from 26.3% a year ago, and operating margin fell to 11.2% from 10.8% (though slightly up sequentially). This margin pressure could persist due to supply chain constraints and higher input costs, potentially limiting earnings growth.
- Stock in Downtrend: The stock is down 15.5% over the past six months and 3.8% over three months, trading at $291.82, well below the 52-week high of $379.23. Technical indicators suggest a corrective phase, with the price breaking below key moving averages, indicating bearish momentum.
- High Trailing PE: The trailing PE of 35.5x is elevated, reflecting current earnings that are depressed relative to forward expectations. If earnings growth fails to materialize, the stock could face de-rating, especially given the PEG ratio of 4.26, which suggests overvaluation relative to growth.
- Execution Risks: The company faces risks in ramping up production to meet increased demand, as highlighted by recent news on supply gaps. Any delays or cost overruns in major programs could hurt margins and investor confidence, given the wide range of analyst targets (low $285, high $393).
LHX Technical Analysis
L3Harris is currently in a clear downtrend, with the stock trading at $291.82 as of August 14, 2026, down 15.5% over the past six months and 3.8% over the past three months. The 1-year price change is +7.7%, but this masks a significant decline from the 52-week high of $379.23; the stock is now trading at 77% of its 52-week range, closer to the low of $262.68. This positioning suggests that the stock is in a corrective phase after a prior rally, with the longer-term uptrend now under threat as the price has broken below key moving averages.
Beta
0.75
0.75x market volatility
Max Drawdown
-28.2%
Largest decline past year
52-Week Range
$263-$379
Price range past year
Annual Return
+2.9%
Cumulative gain past year
| Period | LHX Return | S&P 500 |
|---|---|---|
| 1m | -1.3% | +4.0% |
| 3m | -9.7% | +5.3% |
| 6m | -20.9% | +12.6% |
| 1y | +2.9% | +20.1% |
| ytd | -8.6% | +13.3% |
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LHX Fundamental Analysis
L3Harris reported revenue of $5.744 billion in Q1 2026 (ending April 3, 2026), representing 11.9% year-over-year growth, a notable acceleration from the 5.4% growth seen in Q1 2025. The company's revenue trajectory has been steadily improving, with sequential growth from $5.648 billion in Q4 2025 to $5.744 billion in Q1 2026, driven by strong demand across its segments, particularly Space and Airborne Systems, which contributed $2.99 billion in revenue. This growth is supported by record backlogs and increased defense spending, but the company faces margin headwinds as gross margin contracted to 24.4% in Q1 2026 from 26.3% in the year-ago quarter.
Quarterly Revenue
$5.7B
2026-04
Revenue YoY Growth
+11.9%
YoY Comparison
Gross Margin
24.4%
Latest Quarter
Free Cash Flow
$2.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is LHX Overvalued?
Given that L3Harris is profitable with a trailing net income of $512 million in Q1 2026, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 35.5x, while the forward PE is 21.7x, implying that the market expects significant earnings growth over the next year. This gap suggests that investors are pricing in a substantial recovery in profitability, likely driven by margin expansion and continued revenue growth. The forward PE of 21.7x is in line with the broader aerospace & defense sector average of around 20x, indicating that the stock is fairly valued relative to peers on a forward basis.
PE
35.5x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 22x~36x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a debt-to-equity ratio of 0.57, which is manageable but not negligible, and interest expenses of $136M in Q1 2026 that consume a portion of operating income. The company's gross margin contracted to 24.4% in Q1 2026 from 26.3% a year ago, indicating cost pressures that could persist. Additionally, the trailing PE of 35.5x implies high expectations for earnings growth; if the company fails to deliver, the stock could face de-rating. Free cash flow of $2.589B provides a cushion, but the payout ratio of 56.2% limits flexibility for debt reduction or reinvestment.