L3Harris Technologies: Assessing Valuation After Major Defense Facility Expansion and NTS-3 Satellite Launch

L3Harris Technologies (LHX) has just made headlines with two strategic milestones that could reshape its future. The company completed a $100 million expansion at its Florida satellite integration and test facility. This effort targets urgent Department of Defense priorities, specifically enhancing the Golden Dome for America initiative. Additionally, L3Harris celebrated the launch of its advanced, fully reprogrammable Navigation Technology Satellite-3 (NTS-3), which represents a significant step forward for defense navigation systems and on-orbit experimentation. For those following the stock, these actions demonstrate the company’s intent to remain at the center of U.S. national security and space technology innovation. Over the past year, L3Harris’ performance has attracted attention, with momentum accelerating in recent months. The company’s shares are up 23% over the past year and 34% year-to-date. This trend suggests that investors are starting to recognize both short-term successes and the company’s growing role in national defense. These developments follow a series of contract wins and technology deployments, supporting a narrative of sustained progress rather than an isolated event. The main question now is whether L3Harris has potential for further gains or if the current price already reflects its advanced position in defense technology. Is there still an opportunity for long-term growth, or has the market already accounted for the company’s latest achievements?

Most Popular Narrative: 7.4% Undervalued

According to community narrative, L3Harris Technologies is currently considered undervalued, with analysts projecting that the stock trades below its fair value based on future growth assumptions.

The U.S. defense budget is expected to grow, with new defense initiatives and a potential increase in funding that could benefit L3Harris and support revenue growth. L3Harris is well positioned in several key growth areas, such as missile warning and tracking, due to recent investments and capability alignment. This is likely to increase future revenue.

Curious about what is powering these bullish valuations? This narrative is driven by bold forecasts for future earnings, margin improvements, and a profit multiple that could surprise seasoned investors. What are the critical assumptions behind this fair value, and where do analysts see the financials heading? Explore further to discover the numbers behind the optimism shaping this narrative’s outlook.

Result: Fair Value of $299.95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, budget constraints or heavy reliance on fixed-price contracts could quickly change L3Harris’s outlook. These factors could act as catalysts for a shift in sentiment.

Find out about the key risks to this L3Harris Technologies narrative.

Another View: Our DCF Model’s Take

Taking a different approach, the SWS DCF model also suggests L3Harris Technologies is undervalued. However, this forecast relies on longer-term cash flow assumptions. Could fresh risks or new deals tip the scales?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out L3Harris Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own L3Harris Technologies Narrative

If you want to dig deeper and see for yourself, you can build your own perspective in just a few minutes. Do it your way.

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.

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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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