L3Harris Technologies
LHX
$286.67
-0.99%
L3Harris Technologies is a global aerospace and defense technology company that designs, develops, and manufactures advanced communication systems, sensors, avionics, space systems, missiles, and unmanned aerial vehicles, serving primarily government and military customers. As one of the largest defense primes in the U.S., it holds a distinct competitive position through its portfolio of mission-critical technologies and its role in maintaining the FAA's communication infrastructure. The current investor narrative centers on the company's ability to capitalize on rising global defense budgets, particularly in response to geopolitical tensions such as the Iran conflict, while also navigating supply chain constraints and the integration of recent acquisitions. Debates also revolve around the sustainability of its growth trajectory, margin expansion, and the impact of new procurement models like the Pentagon's SHIELD initiative.…
LHX
L3Harris Technologies
$286.67
Related headlines
Investment Opinion: Should I buy LHX Today?
Rating: Buy. The thesis is that L3Harris offers a compelling risk/reward with 25.9% upside to the average analyst target of $364.50, supported by accelerating revenue growth and margin expansion. The consensus recommendation is Buy (mean 1.61), and the stock is trading at a forward PE of 21.6x, in line with the industry average, making it attractive for long-term investors.
Sign up to view all
LHX 12-Month Price Forecast
The AI assessment is bullish with medium confidence. L3Harris's accelerating revenue growth, improving margins, and reasonable forward valuation support a positive outlook. However, the negative price momentum and competitive risks warrant caution. The stance would be upgraded to high confidence if the stock breaks above its 50-day moving average and revenue growth sustains above 10%. It would be downgraded to neutral if the stock falls below $262 or if forward PE exceeds 25x.
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 +19.7% versus the current price.
Average Target
$343.27
0 analysts
Implied Upside
+19.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$285 - $393
Analyst target range
L3Harris is covered by 16 analysts, with a consensus recommendation of 'Buy' and a mean rating of 1.61 (where 1 is Strong Buy and 5 is Sell). The average target price is $364.50, implying an upside of 25.9% from the current price of $289.53. The distribution includes 10 Buy, 5 Hold, and 1 Sell, indicating a bullish tilt. The target range is $285.00 to $443.00, with the low target near the current price, suggesting some analysts see limited downside, while the high target implies a 53% upside, reflecting optimism about defense spending and margin expansion. The wide spread between low and high targets indicates high uncertainty, but recent ratings from major firms like Bernstein (Outperform), Citigroup (Buy), and Morgan Stanley (Overweight) have been positive, with no downgrades in the past six months, reinforcing the bullish sentiment.
Bulls vs Bears: LHX Investment Factors
L3Harris presents a mixed picture: strong fundamental growth and analyst optimism are offset by a significant price decline and valuation concerns. The bull case is supported by accelerating revenue, margin expansion, and geopolitical tailwinds, while the bear case hinges on high trailing PE, negative FCF, and competitive threats. Currently, the bull case has stronger evidence given the 25.9% upside to the average target and improving profitability, but the stock's momentum is negative. The most critical tension is whether the company can convert its record backlogs into profitable growth amid supply chain constraints and competitive disruption, which will determine if the current valuation is justified.
Bullish
- Accelerating Revenue Growth: Q1 FY2026 revenue grew 11.9% YoY to $5.744B, up from 5.8% in Q4 FY2025, driven by strong demand in Space and Airborne Systems ($2.99B) and Communication Systems ($1.855B). This acceleration signals robust defense spending tailwinds.
- Strong Analyst Consensus and Upside: With 16 analysts, the consensus is Buy (mean rating 1.61) and the average target price is $364.50, implying 25.9% upside from the current $289.53. The high target of $443 suggests 53% upside, reflecting optimism about defense budgets and margin expansion.
- Healthy Balance Sheet and Cash Flow: Debt-to-equity is a conservative 0.57, and trailing twelve-month free cash flow is $2.589B, supporting dividends and buybacks. The current ratio of 1.19 indicates adequate liquidity despite Q1's negative FCF of -$194M due to working capital swings.
- Margin Expansion Potential: Operating margin improved to 11.2% in Q1 FY2026 from 6.7% in Q4 FY2025, and net margin rose to 8.9% from 5.3%. This demonstrates effective cost control and operating leverage, which could drive further earnings growth.
Bearish
- Significant Price Downtrend: The stock is down 17.2% over the past six months and 4.9% YTD, trading near the lower end of its 52-week range (76% of the range). This negative momentum could persist if market sentiment remains weak.
- High Valuation on Trailing Earnings: The trailing PE is 35.5x, a 61% premium to the industry average of 22x. While forward PE is 21.6x, the PEG ratio of 4.26 suggests the stock is overvalued relative to its growth rate, which could lead to multiple compression.
- Negative Free Cash Flow in Q1: Q1 FY2026 free cash flow was -$194M, a sharp swing from positive TTM FCF of $2.589B. This volatility could signal working capital management issues or operational challenges, potentially impacting dividend sustainability.
- Competitive Disruption Risk: Private companies like Saronic are disrupting traditional defense contracting with faster, cheaper autonomous vessels, and the Pentagon's SHIELD initiative shifts to a competitive marketplace model, potentially eroding L3Harris's market share.
LHX Technical Analysis
L3Harris is currently in a clear downtrend, with the stock price at $289.53 as of August 6, 2026, down 17.2% over the past six months and 4.9% year-to-date. The stock is trading near the lower end of its 52-week range, at approximately 76% of the range (current price relative to the low of $262.68 and high of $379.23), indicating a significant pullback from its highs. This positioning suggests the market is pricing in negative sentiment, but also presents a potential value opportunity if the decline is overdone.
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
+4.7%
Cumulative gain past year
| Period | LHX Return | S&P 500 |
|---|---|---|
| 1m | -2.3% | +2.4% |
| 3m | -4.3% | +4.6% |
| 6m | -18.0% | +11.7% |
| 1y | +4.7% | +21.4% |
| ytd | -5.8% | +13.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
LHX Fundamental Analysis
L3Harris's revenue has been growing steadily, with the most recent quarter (Q1 FY2026, ended April 3, 2026) reporting $5.744 billion, up 11.9% year-over-year, accelerating from the 5.8% growth seen in Q4 FY2025. This growth is driven by strong demand across its segments, particularly Space and Airborne Systems ($2.99 billion) and Communication Systems ($1.855 billion), which together account for the majority of revenue. The company's profitability is solid, with net income of $512 million in Q1 FY2026, translating to a net margin of 8.9%, up from 5.3% in the prior quarter, and gross margin of 24.4%, which is stable but slightly below the 25.6% in Q4 FY2025. Operating margin improved to 11.2% from 6.7% in the prior quarter, indicating better cost control. The balance sheet is healthy, with a debt-to-equity ratio of 0.57, current ratio of 1.19, and free cash flow of $2.589 billion on a trailing twelve-month basis, though Q1 FY2026 saw negative free cash flow of -$194 million due to working capital swings. ROE is 8.2%, reflecting efficient use of equity, and the company generates sufficient cash to fund its dividend and buybacks.
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
Open an Account, get $2 TSLA now!
Valuation Analysis: Is LHX Overvalued?
Given that L3Harris is profitable, the primary valuation metric is the price-to-earnings (PE) ratio. The trailing PE is 35.5x, while the forward PE is 21.6x, indicating the market expects significant earnings growth. This gap implies a forward earnings growth rate of over 60%, which is aggressive but supported by analyst estimates of EPS growth. Compared to the industry average PE of 22x (based on available data), L3Harris trades at a 61% premium on a trailing basis, but on a forward basis, it is roughly in line with the sector. The premium is justified by its strong market position and growth prospects in defense. Historically, the stock's PE has ranged from 21.5x to 63.4x over the past few years, with the current trailing PE of 35.5x near the middle of that range, suggesting it is not overly expensive relative to its own history. The PEG ratio of 4.26 is high, indicating that the stock may be overvalued relative to its growth rate, but this is common for defense primes with cyclical earnings.
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 high trailing PE of 35.5x, which implies aggressive earnings growth expectations; if growth disappoints, the stock could face multiple compression. The negative free cash flow of -$194M in Q1 FY2026, despite a TTM FCF of $2.589B, indicates working capital volatility that could pressure dividends (payout ratio 56%) or increase debt. Additionally, the debt-to-equity ratio of 0.57, while moderate, could become a burden if interest rates rise or cash flow deteriorates.
FAQ
The key risks are: 1) Financial: High trailing PE (35.5x) and negative Q1 free cash flow (-$194M) could lead to multiple compression or dividend pressure. 2) Competitive: Private firms like Saronic and the Pentagon's SHIELD initiative could disrupt traditional contracting, eroding market share. 3) Macro: Defense budget cuts or geopolitical de-escalation could reduce demand. 4) Company-specific: Supply chain constraints may limit revenue growth and margin expansion. The most severe risk is a combination of these factors leading to a drop to the 52-week low of $262.68, a 9.3% loss. Investors should monitor these risks closely.
The 12-month forecast is moderately bullish. The base case (50% probability) sees the stock reaching $340-$380, aligning with the average analyst target of $364.50, assuming steady growth and margin stability. The bull case (30% probability) targets $364.50-$443, driven by defense spending surges and margin expansion. The bear case (20% probability) sees $262.68-$285, if growth disappoints or competitive pressures intensify. The most likely scenario is the base case, with the stock trading near $364, implying a 25.9% upside from the current price. Key assumptions include sustained revenue growth above 8% and no major contract losses.
LHX's trailing PE of 35.5x is 61% above the industry average of 22x, suggesting overvaluation on historical earnings. However, the forward PE of 21.6x is in line with the sector, indicating the market expects significant earnings growth. The PEG ratio of 4.26 is high, implying the stock is overvalued relative to its growth rate, but this is common for defense primes with cyclical earnings. Compared to its own history, the trailing PE is near the middle of its 5-year range (21.5x-63.4x), so it's not excessively expensive. The market is pricing in robust growth, and if that materializes, the valuation is justified; otherwise, it could contract.
LHX is a good buy for investors with a long-term horizon, given the 25.9% upside to the average analyst target of $364.50 and a consensus Buy rating. The stock's forward PE of 21.6x is in line with the industry, and revenue growth is accelerating at 11.9% YoY. However, the stock has been in a downtrend, down 17.2% over six months, so investors should be prepared for volatility. The biggest downside risk is a decline to the 52-week low of $262.68, a 9.3% loss, but the fundamental support and analyst sentiment suggest limited downside. For risk-tolerant investors, it's a compelling entry point; for conservative investors, waiting for a clearer uptrend may be prudent.
LHX is better suited for long-term investment due to its cyclical nature and dependence on defense budgets. The stock's beta of 0.746 indicates lower volatility than the market, but it has shown significant price swings, with a 28.2% max drawdown. The dividend yield of 1.58% and payout ratio of 56% provide some income, but the primary value is in capital appreciation. Given the accelerating revenue growth and margin expansion, a holding period of at least 3-5 years is recommended to ride out defense spending cycles. Short-term traders may find opportunities in the current downtrend, but the stock's fundamentals are better aligned with a long-term buy-and-hold strategy.