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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on LHX

L3Harris Technologies' recent performance has been positively driven by rising defense demand and strong drone tech momentum. The company's appointment of Rob Mitrevski to lead the pursuit of the U.S. government's next-generation missile defense initiative, Golden Dome, underscores its strategic importance and responsiveness to national defense needs. Additionally, L3Harris' involvement in the defense industry, backed by nearly $1 trillion in annual spending, positions it well for growth. Its focus on innovation, industry collaboration, and advanced technologies also supports its efforts in missile defense and other areas.

1.c. Company Highlights

2. L3Harris Delivers Strong Q3 Results with Double-Digit Growth

L3Harris reported a robust third quarter with double-digit organic growth, driven by increased international deliveries and ramp-up of key programs. Revenue came in at $1.5 billion, $1.7 billion, and $1.8 billion for the CS, IMS, and SAS segments, respectively, with Aerojet Rocketdyne delivering 15% organic growth. The company's financial performance was highlighted by 15.9% margins and a book-to-bill ratio of 1.2, indicating strong demand. EPS came in at $2.7, beating estimates of $2.58.

Publication Date: Nov -01

📋 Highlights
  • Record Financial Backlog:: Aerojet Rocketdyne achieved $8.3 billion in backlog, driven by solid rocket motor demand and expanded production capacity.
  • Margin Expansion:: Total company operating margin reached 15.9%, with increased guidance to high 15% for 2025 due to cost savings and program execution.
  • Revenue Growth:: Full-year revenue guidance raised to $22 billion, reflecting 6% organic growth and strong performance in defense and space sectors.
  • ISR Segment Momentum:: Revenue up 17% organically, with backlog doubling in 12 months and international interest in programs like C-130 upgrades.
  • Book-to-Bill Ratio:: Maintained a 1.2 ratio in Q3, signaling robust order intake and alignment with multiyear demand for missile defense and space programs.

Segment Performance

The CS segment saw a 6% increase in revenue, driven by international deliveries and the Next Generation Jammer program. IMS revenue grew 17% organically, driven by multiple ISR classified programs. SAS revenue increased 7%, primarily due to higher FAA volume in Mission Networks and Airborne Combat Systems. Aerojet Rocketdyne continued its strong performance with 15% organic growth, marking its second consecutive quarter of double-digit growth.

Guidance and Outlook

L3Harris increased its revenue guidance to $22 billion, representing 6% full-year organic growth. The company also raised its segment operating margin guidance to high 15%, driven by cost savings and program execution. Non-GAAP EPS is expected to be in the range of $10.50 to $10.70 per share. Analysts estimate next year's revenue growth at 2.5%, indicating a potential slowdown.

Valuation

With a P/E Ratio of 30.96 and EV/EBITDA of 15.64, L3Harris is trading at a premium. However, its ROE of 9.08% and ROIC of 5.85% indicate strong profitability. The company's Net Debt / EBITDA ratio of 0.11 suggests a healthy balance sheet. As the company continues to deliver strong results, its valuation multiples will be closely watched to determine if the current premium is justified.

3. NewsRoom

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Nothing Can Stop Defense Stocks Right Now

Nov -04

Source: schaeffersresearch.com

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I Just Made A Big Bet - And Reshaped My Dividend Portfolio Around It

Nov -01

Source: seekingalpha.com

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3 Aerospace-Defense Stocks to Watch Amid Supply-Chain Constraints

Oct -28

Source: zacks.com

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Buy 3 Drone Technology Stocks for a Stable Portfolio in 2026

Oct -20

Source: zacks.com

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My Entire Financial Future Relies On These 16 Stocks

Oct -14

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Why I'm Betting 75% Of My Portfolio On America's Future

Oct -08

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How I Would Build An Ultra-High-Conviction Retirement Portfolio Right Now

Oct -03

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KTOS or LHX: Which Stock Stands Stronger in Today's Defense Boom?

Aug -25

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.50%)

6. Segments

Space & Airborne Systems

Expected Growth: 1.5%

As a leading provider of space and airborne systems, this segment is expected to maintain its growth pace, driven by continued investments in space exploration and national security.

Integrated Mission Systems

Expected Growth: 1.7%

With the increasing importance of ISR and cybersecurity, this segment is expected to experience higher growth, driven by government investments in these areas.

Aerojet Rocketdyne

Expected Growth: 1.3%

While Aerojet Rocketdyne is a key player in the propulsion systems market, its revenue is expected to grow at a slightly slower pace, due to the competitive landscape and budget constraints in the space and defense industries.

Communication Systems

Expected Growth: None%

None

Corporate Eliminations

Expected Growth: 0.0%

As a consolidation of intercompany transactions, this segment is not expected to experience any growth or decline.

7. Detailed Products

Aviation Systems

L3Harris Technologies provides a range of aviation systems, including communication systems, navigation systems, and surveillance systems for military and commercial aircraft.

C6ISR Systems

L3Harris Technologies offers a range of C6ISR (Command, Control, Communications, Computers, Cyber-Effects, and Intelligence, Surveillance, and Reconnaissance) systems for military and government agencies.

Electronic Systems

L3Harris Technologies provides electronic systems, including electronic warfare, night vision, and communication systems for military and defense applications.

Geospatial Solutions

L3Harris Technologies offers geospatial solutions, including satellite imaging, mapping, and analytics for government and commercial customers.

Mission Networks

L3Harris Technologies provides mission networks, including communication networks, data links, and satellite communications for military and government agencies.

Space and Airborne Systems

L3Harris Technologies offers space and airborne systems, including satellites, payloads, and sensors for government and commercial customers.

Training and Simulation

L3Harris Technologies provides training and simulation solutions, including flight simulators, ground simulators, and virtual training systems for military and commercial customers.

8. L3Harris Technologies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

L3Harris Technologies, Inc. operates in a niche market with high barriers to entry, reducing the threat of substitutes. However, the company's products and services can be substituted with those of its competitors, posing a moderate threat.

Bargaining Power Of Customers

L3Harris Technologies, Inc. has a diverse customer base, including government agencies and commercial customers. The company's customers have limited bargaining power due to the specialized nature of its products and services.

Bargaining Power Of Suppliers

L3Harris Technologies, Inc. relies on a network of suppliers for components and materials. While the company has some bargaining power due to its size and scale, suppliers may still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The defense and aerospace industry has high barriers to entry, including significant capital requirements and regulatory hurdles. New entrants would face significant challenges in competing with established players like L3Harris Technologies, Inc.

Intensity Of Rivalry

The defense and aerospace industry is highly competitive, with several established players competing for contracts and market share. L3Harris Technologies, Inc. faces intense rivalry from companies like Lockheed Martin, Boeing, and Raytheon Technologies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.93%
Debt Cost 3.97%
Equity Weight 59.07%
Equity Cost 7.13%
WACC 5.83%
Leverage 69.29%

11. Quality Control: L3Harris Technologies, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
L3Harris

A-Score: 6.2/10

Value: 3.0

Growth: 5.7

Quality: 6.8

Yield: 4.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Northrop Grumman

A-Score: 6.0/10

Value: 3.5

Growth: 5.9

Quality: 6.6

Yield: 3.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Raytheon Technologies

A-Score: 5.4/10

Value: 2.3

Growth: 3.8

Quality: 5.0

Yield: 4.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
HEICO

A-Score: 5.0/10

Value: 0.5

Growth: 7.3

Quality: 7.1

Yield: 0.0

Momentum: 7.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Lockheed Martin

A-Score: 4.7/10

Value: 2.8

Growth: 5.1

Quality: 4.5

Yield: 6.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
GE

A-Score: 4.7/10

Value: 0.7

Growth: 3.4

Quality: 6.6

Yield: 0.0

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

278.5$

Current Price

278.5$

Potential

-0.00%

Expected Cash-Flows