L3Harris downgraded to Neutral at Baird after Aerojet Rocketdyne deal

As previously reported, Baird analyst Peter Arment downgraded L3Harris Technologies (LHX) to Neutral from Outperform with a price target of $241, down from $290. The deal to acquire Aerojet Rocketdyne (AJRD) in an all-cash transaction valued at about $4.7B in enterprise value is strategic in the long-term, but will be an overhang on the stock in the near-term, Arment tells investors. He also notes that the deal is dilutive to 2023 estimates and "only" about 2% earnings accretive in 2024, arguing that the deal accretion is "not very compelling," and adding that regulatory risks are "still high."