L3Harris Technologies (LHX) AI Stock Analysis

• Market Cap: $40.24B
• Dividend Yield: 2.19%
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 27.2
• Beta (1Y): 0.60
• Revenue Growth: 9.82%
• EPS Growth: 22.33%
• Country: US
• Employees: 47,000
• Sector: Industrials
• Sector Strength: 70
• Industry: Aerospace & Defense
• EPS (TTM): 7.88
• Shares Outstanding: 187,716,340
• 10 Day Avg. Volume: 1,709,984
• 30 Day Avg. Volume: 1,439,195
• PEG Ratio: 1.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.84
• Price to Cash Flow (P/CF): 8.70
• P/FCF Ratio: 9.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $252.15
• Price Target Upside: 13.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

L3Harris Technologies demonstrates solid financial fundamentals with strong revenue and profitability growth. The company's effective cost management and low financial leverage are key strengths. Despite the positive earnings call, challenges in specific segments and valuation concerns moderate the overall score.

Positive Factors

Cash Management

A significant portion of free cash flow was returned to shareholders through dividends and share buybacks, reflecting strong cash management.

Operational Efficiency

Sales per employee improved significantly, showing increased efficiency and productivity within the company.

Stock Repurchases

Proceeds from the sale of Commercial Aviation Solutions are expected to re-accelerate stock repurchases, with a baseline of $1 billion planned.

Negative Factors

International Sales

The percentage of revenue from international sales decreased slightly, which may suggest challenges in global market expansion.

Operating Margins

Segment operating margins are expected to decline, particularly for Aerojet, due to productivity issues.

Revenue Impact

The sale of Commercial Aviation Solutions (CAS) could lead to a $480 million reduction in revenue for 2025, impacting the company's revenue estimates.

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 Technologies generates revenue primarily through the sale of its products and services to government and commercial customers worldwide. The company's revenue streams include contracts with the U.S. Department of Defense, international governments, and commercial clients. Significant revenue is derived from long-term contracts for integrated mission systems, such as intelligence, surveillance, and reconnaissance solutions, as well as command and control systems. The Communication Systems segment contributes through sales of tactical radios and broadband communication systems. The Space and Airborne Systems segment earns income from advanced sensors, payloads, and space-based technologies, while the Aviation Systems segment provides training, simulation, avionics, and air traffic management solutions. L3Harris also benefits from strategic partnerships and collaborations that enhance its technological capabilities and market reach.

L3Harris Technologies Financial Statement Overview

Summary

L3Harris Technologies exhibits strong financial performance with significant revenue growth, solid profitability, and robust cash generation. The company's low leverage and effective equity utilization provide stability. However, there is room for improvement in operating efficiency and aligning cash flow with reported earnings.

Income Statement

L3Harris Technologies demonstrates strong and consistent revenue growth, with a notable increase of 9.81% from 2023 to 2024. The company maintains a solid gross profit margin and has improved its net profit margin over the years, reflecting effective cost management and operational efficiency. However, a slight decrease in EBIT margin indicates some pressure on operating efficiency despite overall profitability.

Balance Sheet

The balance sheet shows a stable equity base with a Debt-to-Equity ratio of 0.06, indicating low financial leverage and a strong equity position. The Return on Equity is robust, showing the company's effective use of equity capital to generate profits. However, there is a slight decline in the equity ratio, suggesting a need to monitor the balance between liabilities and assets.

Cash Flow

The cash flow statement reflects healthy operating cash flow with a strong Free Cash Flow growth rate of 30.54% from 2023 to 2024. The Operating Cash Flow to Net Income ratio is favorable, indicating efficient cash generation relative to net income. Nonetheless, the Free Cash Flow to Net Income ratio suggests room for improvement in aligning cash flow with reported earnings.

Breakdown
Mar 2025	Dec 2023	Dec 2022	Dec 2021	Mar 2021
Income Statement		Total Revenue
21.32B	19.42B	17.06B	17.81B	18.19B
	Gross Profit
5.52B	5.11B	4.93B	5.38B	5.31B
	EBIT
1.92B	1.43B	2.37B	2.56B	2.39B
	EBITDA
3.56B	2.93B	2.50B	3.52B	2.64B
	Net Income Common Stockholders
1.50B	1.23B	1.06B	1.85B	1.12B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
615.00M	560.00M	880.00M	941.00M	1.28B
	Total Assets
42.00B	41.69B	33.52B	34.71B	36.96B
	Total Debt
1.16B	13.95B	7.79B	7.83B	7.69B
	Net Debt
540.00M	13.39B	6.91B	6.89B	6.41B
	Total Liabilities
22.42B	22.86B	14.90B	15.39B	16.12B
	Stockholders Equity
19.51B	18.77B	18.52B	19.21B	20.72B
Cash Flow		Free Cash Flow
2.15B	1.65B	1.91B	2.35B	2.42B
	Operating Cash Flow
2.56B	2.10B	2.16B	2.69B	2.79B
	Investing Cash Flow
-263.00M	-7.02B	-250.00M	1.39B	751.00M
	Financing Cash Flow
-2.22B	4.59B	-1.95B	-4.41B	-3.11B

L3Harris Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 222.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 222.03 is above the 20-day moving average (MA) of 210.29, above the 50-day MA of 207.46, and below the 200-day MA of 224.30, indicating a neutral trend. The MACD of 0.58 indicates Positive momentum. The RSI at 49.95 is Neutral, neither overbought nor oversold. The STOCH value of 21.58 is Neutral, 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	78 Outperform	$73.84B	18.08	27.75%	1.60%	4.44%	110.33%
AXON	78 Outperform	$42.90B	115.36	19.10%	―	33.32%	111.64%
LHX	76 Outperform	$40.24B	27.21	7.85%	2.19%	9.82%	22.33%
GD	75 Outperform	$72.95B	19.94	17.44%	2.09%	12.88%	13.78%
LMT	74 Outperform	$108.77B	20.79	81.04%	2.78%	5.14%	-19.14%
TDG	68 Neutral	$72.81B	46.33	-29.16%	―	16.89%	20.33%
Sector *	62 Neutral	$7.50B	12.89	3.19%	3.38%	3.64%	-14.27%

L3Harris Technologies Corporate Events

L3Harris Technologies Secures New Credit Facilities

On February 18, 2025, L3Harris Technologies announced the establishment of a new $2.5 billion five-year senior unsecured revolving credit facility, replacing a previous $2 billion facility. This move enhances L3Harris’ financial flexibility, allowing it to borrow, prepay, and re-borrow funds, with certain subsidiaries designated as borrowers. Concurrently, L3Harris set up a new $500 million 364-day credit facility, replacing a prior $1.5 billion facility. These developments demonstrate L3Harris’ strategic financial adjustments to support its operations and maintain favorable terms based on its senior debt ratings.