LHX: Earnings Momentum Will Accelerate Amid Expanding Defense And Missile Demand

Analysts have lifted their price target on L3Harris Technologies from $320 to a range of about $350 to $353 per share. This reflects updated models after solid Q3 results and a view that the company is well positioned for future defense awards amid supportive aerospace demand trends.

Analyst Commentary

Bullish analysts point to the recent price target increases into the low to mid $350s as evidence that L3Harris is executing well against expectations and that its earnings power is underappreciated at current levels.

The updated models reflect confidence in both the company specific pipeline and broader sector tailwinds, particularly in aerospace and defense spending.

Bullish Takeaways

• Higher price targets into the $350 to $353 range suggest analysts see upside to the company’s medium term valuation relative to prior assumptions.
• Model revisions after Q3 highlight improving visibility on future defense awards and program wins, supporting expectations for steady revenue and margin expansion.
• Exposure to strengthening aircraft production and resilient aftermarket demand is viewed as a structural growth driver that can support multiple expansion.
• Consensus earnings expectations moving higher into future quarters indicate confidence in management’s ability to execute against a robust backlog.

Bearish Takeaways

• Some cautious analysts flag the potential impact of government funding uncertainties and possible shutdown scenarios on defense budget timing and visibility.
• Defense remains a more nuanced segment, with risks that shifting priorities or procurement delays could pressure near term growth trajectories.
• While sentiment is improving, any slowdown in aerospace production or travel related aftermarket demand could challenge the more optimistic valuation cases.
• Execution missteps on large programs or integration risks across the portfolio could limit the extent to which the stock can sustain a higher premium multiple.

What's in the News

• Former L3Harris executive Peter Williams pleaded guilty to stealing and selling eight U.S. government zero day cyber exploits to a Russian broker in exchange for millions in cryptocurrency, raising governance and security questions around a former company unit. (Cyberscoop)
• The Pentagon is pressing major missile suppliers, including L3Harris, to double or quadruple missile output in anticipation of potential high end conflict, which underscores robust long term demand for advanced munitions. (Wall Street Journal)
• L3Harris and Arkansas officials broke ground on the Arkansas Advanced Propulsion Facilities in Camden, a new solid rocket motor campus that will boost large SRM manufacturing capacity six fold to support tactical and air defense missiles and hypersonic programs.
• L3Harris received a contract exceeding $2.26 billion to deliver modified Bombardier Global 6500 airborne early warning and control aircraft to the Republic of Korea Air Force, expanding its international ISR and command and control footprint.
• The company signed a memorandum of understanding with EDGE Group in the UAE to collaborate on defense opportunities and joint R&D in artificial intelligence and autonomy, deepening its presence in Middle Eastern defense markets.

Valuation Changes

• Fair Value Estimate remains unchanged at approximately $334.16 per share, indicating no material shift in the core intrinsic valuation view.
• The Discount Rate has risen slightly from about 7.94 percent to roughly 7.99 percent, modestly increasing the required return applied to future cash flows.
• Revenue Growth is effectively unchanged, remaining around 5.50 percent and signaling a stable outlook for top line expansion assumptions.
• The Net Profit Margin is effectively unchanged at about 10.97 percent, reflecting consistent expectations for underlying profitability.
• The Future P/E has risen slightly from roughly 27.45x to about 27.49x, implying a marginally higher multiple applied to forward earnings.