LHX: Future Missile Demand Will Drive Earnings Momentum And Premium Multiple

The analyst price target for L3Harris Technologies has been nudged higher, with our fair value estimate rising by about $1 to approximately $335. This reflects analysts modestly upgrading long term growth expectations following stronger 3Q25 results and an improved outlook for future contract awards, despite slightly lower projected profit margins and a marginally higher discount rate.

Analyst Commentary

Street research commentary around L3Harris Technologies has turned more constructive following the latest quarterly update, with multiple price target increases reflecting improved confidence in both execution and long term growth prospects.

Analysts are updating their models to reflect stronger than expected 3Q25 performance and a healthier outlook for future program wins, particularly in areas leveraged to ongoing aerospace and defense demand.

Bullish Takeaways

• Bullish analysts have raised their price targets into the low to mid $350 range. This signals that they see meaningful upside from current levels as earnings power compounds over the next several years.
• Model updates point to stronger medium term revenue growth, supported by expectations for additional contract awards and solid positioning across key defense and aerospace programs.
• Positive sentiment around aircraft production and resilient aftermarket activity is viewed as a tailwind for L3Harris Technologies, reinforcing confidence in the companys ability to convert its backlog into cash flow.
• Recent results are seen as evidence of improved execution, with bullish analysts more willing to underwrite a premium valuation multiple relative to prior periods of uncertainty.

Bearish Takeaways

• More cautious analysts flag that defense spending visibility remains somewhat nuanced, with political and budget dynamics posing potential constraints on longer term growth assumptions.
• There is concern that a challenging government funding backdrop could delay or resize certain awards. This would weigh on the pace of backlog conversion and earnings growth.
• Some investors remain focused on execution risk around integrating complex programs and maintaining margins in a tight labor and supply chain environment, which could cap further multiple expansion.

What's in the News

• Former L3Harris subsidiary employee Peter Williams pleaded guilty to stealing and selling eight U.S. government zero day cyber exploits to a Russian linked broker, raising governance and security oversight questions around Trenchant operations (Cyberscoop).
• L3Harris is scheduled to report quarterly earnings with Wall Street consensus at $2.57 per share, which is keeping investor focus on order momentum, margin trajectory and cash generation (earnings calendar).
• The Pentagon is urging missile suppliers, including L3Harris, to double or quadruple production of critical munitions, which is highlighting structurally higher demand for advanced missiles and propulsion systems (Wall Street Journal).
• U.S. Defense Secretary Pete Hegseth has called an urgent in person meeting of top military commanders, which is underscoring an elevated defense readiness posture that could sustain spending on key contractors such as L3Harris (Washington Post).
• L3Harris secured an up to $843 million Space Development Agency contract to build 18 Tranche 3 Tracking Layer infrared satellites, which is expanding its role in missile defense and space based sensing for advanced threats.

Valuation Changes

• Fair Value Estimate has risen slightly, from about $334.16 to approximately $335.15 per share, reflecting modestly improved long term expectations.
• Discount Rate has increased marginally, moving from roughly 7.99 percent to about 8.04 percent, implying a slightly higher required return on equity.
• Revenue Growth has edged higher, with medium term annual growth assumptions increasing from around 5.50 percent to roughly 5.53 percent.
• Net Profit Margin has declined slightly, easing from about 10.97 percent to roughly 10.90 percent, tempering some of the benefit from stronger growth assumptions.
• Future P/E has moved up modestly, from roughly 27.49 times to about 27.78 times forward earnings, indicating a small expansion in the valuation multiple.