NYSE:LHX

Stock Analysis Report

Executive Summary

L3Harris Technologies, Inc., an aerospace and defense technology company, provides mission-critical solutions for government and commercial customers worldwide.

Rewards

Trading at 39.4% below its fair value

Earnings are forecast to grow 13.39% per year

Earnings grew by 89.8% over the past year

Pays a reliable dividend of 1.9%

Risk Analysis

Shareholders have been substantially diluted in the past year

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (8.9%) are lower than last year (13.4%)



Snowflake Analysis

Excellent balance sheet average dividend payer.


Similar Companies

Share Price & News

How has L3Harris Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LHX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.5%

LHX

-14.4%

US Aerospace & Defense

-2.0%

US Market


1 Year Return

8.5%

LHX

-23.1%

US Aerospace & Defense

-15.1%

US Market

Return vs Industry: LHX exceeded the US Aerospace & Defense industry which returned -16.5% over the past year.

Return vs Market: LHX exceeded the US Market which returned -14.9% over the past year.


Shareholder returns

LHXIndustryMarket
7 Day-3.5%-14.4%-2.0%
30 Day-15.7%-31.2%-19.7%
90 Day-15.2%-37.5%-23.2%
1 Year10.2%8.5%-21.7%-23.1%-13.4%-15.1%
3 Year70.3%62.0%-6.6%-11.4%10.9%3.7%
5 Year142.7%120.4%21.7%10.4%28.4%14.4%

Price Volatility Vs. Market

How volatile is L3Harris Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is L3Harris Technologies undervalued compared to its fair value and its price relative to the market?

39.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LHX ($178.5) is trading below our estimate of fair value ($294.5)

Significantly Below Fair Value: LHX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LHX is poor value based on its PE Ratio (24x) compared to the Aerospace & Defense industry average (13.3x).

PE vs Market: LHX is poor value based on its PE Ratio (24x) compared to the US market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: LHX is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: LHX is good value based on its PB Ratio (1.7x) compared to the US Aerospace & Defense industry average (1.8x).


Next Steps

Future Growth

How is L3Harris Technologies forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

13.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LHX's forecast earnings growth (13.4% per year) is above the savings rate (1.7%).

Earnings vs Market: LHX's earnings (13.4% per year) are forecast to grow faster than the US market (12.2% per year).

High Growth Earnings: LHX's earnings are forecast to grow, but not significantly.

Revenue vs Market: LHX's revenue (4.9% per year) is forecast to grow slower than the US market (7.1% per year).

High Growth Revenue: LHX's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LHX's Return on Equity is forecast to be low in 3 years time (11.9%).


Next Steps

Past Performance

How has L3Harris Technologies performed over the past 5 years?

23.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LHX has a large one-off loss of $610.0M impacting its January 3 2020 financial results.

Growing Profit Margin: LHX's current net profit margins (8.9%) are lower than last year (13.4%).


Past Earnings Growth Analysis

Earnings Trend: LHX's earnings have grown significantly by 23.6% per year over the past 5 years.

Accelerating Growth: LHX's earnings growth over the past year (89.8%) exceeds its 5-year average (23.6% per year).

Earnings vs Industry: LHX earnings growth over the past year (89.8%) exceeded the Aerospace & Defense industry 3%.


Return on Equity

High ROE: LHX's Return on Equity (7.3%) is considered low.


Next Steps

Financial Health

How is L3Harris Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: LHX's short term assets ($6.3B) exceed its short term liabilities ($4.0B).

Long Term Liabilities: LHX's short term assets ($6.3B) do not cover its long term liabilities ($11.6B).


Debt to Equity History and Analysis

Debt Level: LHX's debt to equity ratio (30.6%) is considered satisfactory.

Reducing Debt: LHX's debt to equity ratio has reduced from 91.1% to 30.6% over the past 5 years.

Debt Coverage: LHX's debt is well covered by operating cash flow (27%).

Interest Coverage: LHX's interest payments on its debt are well covered by EBIT (10.9x coverage).


Balance Sheet

Inventory Level: LHX has a low level of unsold assets or inventory.

Debt Coverage by Assets: LHX's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is L3Harris Technologies's current dividend yield, its reliability and sustainability?

1.90%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LHX's dividend (1.9%) isn’t notable compared to the bottom 25% of dividend payers in the US market (2.04%).

High Dividend: LHX's dividend (1.9%) is low compared to the top 25% of dividend payers in the US market (5.7%).


Stability and Growth of Payments

Stable Dividend: LHX's dividends per share have been stable in the past 10 years.

Growing Dividend: LHX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.3%), LHX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LHX's dividends in 3 years are forecast to be well covered by earnings (29% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Bill Brown (56yo)

8.42s

Tenure

US$16,498,515

Compensation

Mr. William M. Brown, also known as Bill, serves as Executive Chairman of L3Harris Technologies since April 25, 2014 and its Chief Executive Officer since November 1, 2011. Mr. Brown has been Director of L ...


CEO Compensation Analysis

Compensation vs Market: Bill's total compensation ($USD16.50M) is above average for companies of similar size in the US market ($USD11.87M).

Compensation vs Earnings: Bill's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William Brown
Executive Chairman & CEO8.42yrsUS$16.50m0.17% $65.6m
Christopher Kubasik
Vice Chairman0.83yrUS$15.93m0.034% $13.1m
Jesus Malave
Senior VP & CFO0.83yrUS$4.31mno data
Scott Mikuen
Senior VP9.5yrsUS$2.68m0.030% $11.5m
Dana Mehnert
President of Communication Systems4.75yrsUS$2.53m0.044% $17.1m
Edward Zoiss
President of Space & Airborne Systems4.75yrsUS$3.93m0.0098% $3.8m
Todd Gautier
President of Aviation Systems0.83yrUS$5.82m0.0081% $3.1m
Todd Taylor
VP & Principal Accounting Officer4.92yrsno data0.0042% $1.6m
Ross Niebergall
VP & CTO2.67yrsno datano data
Omar Fathi
VP & Chief Information Officerno datano datano data

4.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: LHX's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Brown
Executive Chairman & CEO8.42yrsUS$16.50m0.17% $65.6m
Christopher Kubasik
Vice Chairman0.83yrUS$15.93m0.034% $13.1m
Thomas Dattilo
Independent Director18.67yrsUS$147.39k0.0016% $607.8k
Sallie Bailey
Independent Director2yrsUS$147.39k0.00074% $286.5k
Lloyd Newton
Independent Director0.83yrUS$167.39k0.0053% $2.0m
Robert Millard
Lead Independent Director0.83yrUS$164.89k0.10% $40.1m
Lewis Hay
Independent Director18.17yrsUS$157.39k0.0071% $2.8m
Roger Fradin
Independent Director3.5yrsUS$157.39k0.00052% $201.3k
Lewis Kramer
Independent Director0.83yrUS$162.39k0.0091% $3.5m
Peter Chiarelli
Independent Director7.67yrsUS$157.39k0.00065% $251.7k

2.8yrs

Average Tenure

67yo

Average Age

Experienced Board: LHX's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 87.3%.


Top Shareholders

Company Information

L3Harris Technologies, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: L3Harris Technologies, Inc.
  • Ticker: LHX
  • Exchange: NYSE
  • Founded: 1895
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$38.716b
  • Shares outstanding: 216.90m
  • Website: https://www.l3harris.com

Number of Employees


Location

  • L3Harris Technologies, Inc.
  • 1025 West NASA Boulevard
  • Melbourne
  • Florida
  • 32919
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LHXNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
HRSDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0L3HLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
LHXTWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
HRS-UETLX (Eurotlx)YesCommon StockITUSDJan 1968
L1HX34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

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, modifications, and periodic depot maintenance services for ISR and airborne missions. It also manufactures and integrates maritime integrated command, control, communications, computers, and cyber ISR systems for maritime platforms; unmanned surface and undersea autonomous solutions; power and ship control systems; and other electronic and electrical products and systems, as well as designs and manufactures electro-optical and infrared sensors and surveillance, and targeting systems. Its Space and Airborne Systems segment offers space payloads, sensors, and full-mission solutions; classified intelligence and cyber defense solutions; and avionics and electronic warfare systems. The company’s Communication Systems segment provides tactical radio communications, SATCOM terminals, and battlefield management networks; broadband secured mobile networked communication equipment, including airborne, space, and surface data link terminals, as well as ground stations and transportable tactical SATCOM systems; helmet and weapon mounted integrated night vision systems; and radios, systems applications, and equipment for public safety and professional communications. Its Aviation Systems segment offers defense aviation products; security, detection, and other commercial aviation products; commercial and military pilot training solutions; and mission networks 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 23:53
End of Day Share Price2020/04/03 00:00
Earnings2020/01/03
Annual Earnings2020/01/03


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.