How Strong Q3 Results and Buyback Execution Will Impact L3Harris Technologies (LHX) Investors

• L3Harris Technologies recently reported strong third quarter results, with sales rising to US$5.66 billion and net income increasing to US$462 million compared to the prior year, alongside the completion of a substantial share buyback program totaling 30.18 million shares for US$6.61 billion since 2021.
• An important insight is that the company’s improved operational execution following the Aerojet Rocketdyne acquisition, coupled with rising defense demand, has helped reinforce its position within the growing aerospace and defense sector.
• We’ll explore how L3Harris’s solid quarterly earnings and successful cost-cutting measures influence its longer-term investment outlook.

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L3Harris Technologies Investment Narrative Recap

For investors to consider holding shares in L3Harris Technologies, they must believe in the ongoing upswing in global defense spending and the company’s ability to execute efficiently, particularly in integrating Aerojet Rocketdyne to capture growing demand for advanced aerospace solutions. The completion of a US$6.61 billion share buyback program signals confidence and may support short-term sentiment, but it does not materially alter the biggest near-term risk: the potential impact of fixed-price contracts on profit margins during this transition.

Among recent announcements, the US$5.66 billion third-quarter sales result, combined with higher net income and increased EPS, stands out in context of the company’s efforts to streamline costs and boost earnings post-acquisition. Improved margins and operational gains reflect some progress, a relevant factor as L3Harris seeks to sustain momentum and address integration challenges from its major acquisition.

But unlike the optimism reflected in these results, investors should be aware there remain risks if fixed-price contract...

Read the full narrative on L3Harris Technologies (it's free!)

L3Harris Technologies' outlook projects $24.9 billion in revenue and $2.7 billion in earnings by 2028. This is based on an assumed 5.2% annual revenue growth rate and a $1.0 billion increase in earnings from the current $1.7 billion.

Uncover how L3Harris Technologies' forecasts yield a $334.28 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members offered two fair value estimates for L3Harris ranging from US$334.28 to US$385.08 per share. While projected cost optimization may boost margins, ongoing performance on fixed-price contracts could shape returns in the months ahead; explore how different investors view these factors.

Explore 2 other fair value estimates on L3Harris Technologies - why the stock might be worth as much as 32% more than the current price!

Build Your Own L3Harris Technologies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your L3Harris Technologies research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free L3Harris Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate L3Harris Technologies' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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