AnalystConsensusTarget updated the narrative for LHX

The analyst price target for L3Harris Technologies has been raised from approximately $309 to $323. Analysts cite improving growth trends and increased confidence in the company’s ability to capitalize on new defense programs and sector momentum.

Analyst Commentary

Recent analyst updates for L3Harris Technologies provide a variety of perspectives about the company’s near-term prospects, valuation, and execution capabilities ahead of upcoming earnings reports.

• Bullish analysts have recently raised price targets, with some adjustments reaching as high as $353. They cite robust growth momentum and confidence in L3Harris’s positioning within new defense programs.
• Improved sentiment in the broader aerospace and defense sector, along with expectations for strong aftermarket demand linked to passenger travel and supply chain challenges, are viewed as positive indicators for future performance.
• The company’s strong quarterly results and increased future guidance highlight management’s confidence in capturing opportunities from emerging Department of Defense priorities.
• Some analysts note that growth is beginning to accelerate, which could be a potential catalyst for valuation upside as execution aligns more closely with industry trends.

• Bearish analysts remain somewhat cautious and point to “noisy” or less predictable margins that could limit near-term upside despite underlying sales growth.
• Sector-specific headwinds, such as uncertainty around government shutdowns and potential impacts on fiscal outlooks, may create volatility for defense names, including L3Harris.
• Neutral or sector-perform ratings reflect some concern about the sustainability of margin improvements and the pace of earnings acceleration, especially in a more nuanced defense market environment.

What's in the News

• The Pentagon is urging U.S. missile suppliers, including L3Harris Technologies, to significantly increase missile output because of concerns over a potential future conflict with China (The Wall Street Journal).
• China has begun limiting the export of critical minerals to Western defense companies, which is delaying production and forcing companies like L3Harris to seek alternative sources for vital materials (The Wall Street Journal).
• The U.S. Defense Secretary has ordered an urgent meeting of top military commanders at a Marine Corps base, highlighting the increasing focus on military readiness among major defense contractors such as L3Harris (The Washington Post).
• L3Harris Technologies continues to invest in production capacity and technology, expanding manufacturing for propulsion systems and advanced electronics to support both missile programs and next-generation military platforms.

Valuation Changes

• Consensus Analyst Price Target has increased from $309 to $323, reflecting a modest rise in fair value expectations.
• Discount Rate is up marginally from 8.14% to 8.19%. This indicates slightly higher required returns by the market.
• Revenue Growth estimates have edged higher from 5.20% to 5.23% per year.
• Net Profit Margin projections are nearly unchanged, moving from 10.79% to 10.79%.
• Future P/E ratio has risen from 26.05x to 27.27x. This suggests a higher valuation multiple placed on forward earnings.