LHX
L3Harris Technologies, Inc.$368.00
Sell
Target $295.68
Report: Mar 07, 2026Industrials • Aerospace & Defense • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$368.00-19.7%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$295.68
(20% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$379.23
52 Week Low$195.72
Avg. 3 Month Volume1.53M
Efficiency
LTM Gross Margin25.7%
LTM EBITDA Margin17.2%
LTM EBIT Margin11.6%
LTM Operating Margin9.7%
LTM ROA3.9%
LTM ROE8.3%
LTM ROIC14.3%
LTM ROCE7.4%
Capital Structure
Market Cap (MM)$64.5B
Enterprise Value (MM)$73.8B
Shares Outstanding186.78M
Total Debt (MM)$10.44B
Cash & Equivalents (MM)$1.07B
LTM Net Debt (MM)$9.37B
LTM Net Debt/EBITDA2.5x
Growth
TTM Rev. Growth2.5%
Last 3-Yr Rev. CAGR8.6%
Last 3-Yr EBITDA CAGR14.6%
Last 3-Yr EPS CAGR15.8%
Valuation
Street Target Price$352.25
LTM EV/Revenue3.4x
LTM EV/Gross Profit13.1x
LTM EV/EBIT29.2x
LTM EV/EBITDA19.7x
LTM P/E40.1x
LTM EV/FCF27.5x
LTM P/FCF24.0x
LTM P/TB4.4x
LTM P/B3.3x
Dividend Yield1.4%
Payout Ratio55.9%
Executive SummarySituation: Current price is $368.0 versus fair value $295.68 (-19.7% expected return), and valuation confidence is stable. Debate: Bull case depends on Missile Solutions IPO and $1B DoD Investment. Bear case centers on Moat Erosion and Margin Compression. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The $38.7B record backlog and 1.3x book-to-bill ratio provide high visibility into future revenue growth. The planned Missile Solutions IPO, supported by a $1B DoD investment, could unlock significant value by highlighting a segment with double-digit growth potential. Continued execution of LHX NeXt could drive operating margins toward 11% by FY2028.
Bear Case
Structural growth has decelerated to 2.5%, and incremental ROIC is deeply negative at -120.9%, indicating poor capital allocation. Gross margins are contracting despite cost-saving initiatives, suggesting a lack of pricing power against inflationary headwinds. The current 29.1x EV/FCF multiple is a 35% premium to the 3-year historical average of 21.5x, leaving the stock vulnerable to a significant de-rating.
Key Catalysts
Long-Term (18+ months)Impact: Critical
Missile Solutions IPO and $1B DoD Investment. This event is intended to unlock the value of the high-growth Aerojet Rocketdyne assets. Howev...
Mid-Term (6-18 months)Impact: High
LHX NeXt Savings Realization. The program targets $1.2B in run-rate savings. Validation of these savings in the form of operating margin exp...
Long-Term (18+ months)Impact: Moderate
L3Harris is at a critical juncture as it prepares for its largest capital event since the 2019 merger, while simultaneously facing a leaders...
Primary Risks
Concern: High
Moat Erosion and Margin Compression. The primary risk is that inflationary pressures on fixed-price contracts and supply chain fragility per...
Concern: Medium
Execution Risk of the Missile Solutions IPO. Failure to achieve a premium valuation for the spin-off or a botched operational separation cou...
Concern: Medium
The governance structure is currently defined by the cooperation agreement with Trian Fund Management. The Governance Outcome Tree suggests:...
Recent Activity
2024-11-14SEC Filing (SC 13G/A)
-5.16%T. Rowe Price Associates, Inc. reported 5.2% beneficial ownership of L3Harris Technologies common stock as of September 30, 2024.
2024-07-26SEC Filing (8-K)
-5.70%L3Harris Technologies reported strong Q2 2024 results and increased full-year guidance.
2023-07-27SEC Filing (8-K)
-6.32%L3Harris Technologies released second quarter 2023 financial results and announced an upcoming earnings call.
2023-01-27SEC Filing (8-K)
+7.92%L3Harris Technologies released fourth quarter 2022 financial results and announced an upcoming earnings call.
Valuation Table
9.8/10Decision Grade
Scenario Range
$184
Bear
$295
Base
$358
Bull
$368