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Melbourne, Florida-based L3Harris Technologies, Inc. (LHX) is an agile global aerospace and defense technology innovator, delivering end-to-end solutions that meet customers' mission-critical needs. With a market cap of $46.2 billion, L3Harris provides defense and commercial technologies across space, air, land, sea, and cyber domains. It is expected to release its third-quarter earnings after the market closes on Thursday, Oct. 24.
Ahead of the event, analysts expect L3Harris to report a profit of $3.26 per share, up 2.2% from $3.19 per share reported in the year-ago quarter. Moreover, the company has consistently surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew by 9.1% year-over-year to $3.24 while exceeding the consensus estimates by 1.9%.
For fiscal 2024, analysts expect L3Harris to report an adjusted EPS of $13.06, up 5.7% from 12.36 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 9.4% year-over-year to $14.29.
LHX has gained 15.7% on a YTD basis, lagging behind the S&P 500 Index’s ($SPX) 20.6% gains and the Industrial Select Sector SPDR Fund’s (XLI) 18.9% returns during the same time frame.
Despite reporting better-than-expected earnings, shares of L3Harris plunged 5.7% after the release of its Q2 earnings on Jul. 25. The defense giant posted a solid 12.9% year-over-year revenue increase, amounting to $5.3 billion, though it narrowly missed analysts’ revenue projections.
L3Harris' operating margin expanded by 45 basis points to 9%, thanks to a slight reduction in its cost of revenue and general and admin expenses as a percentage of revenues. However, due to a massive 55% rise in net interest expenses, totaling $172 million, its net margin contracted by 53 basis points to 6.9%.
Despite these mixed signals, L3Harris reported a 4.9% increase in net income, amounting to $366 million, and raised its full-year non-GAAP EPS guidance range from the previously announced $12.70 to $13.05 range to $12.85 to $13.15 range.
The consensus opinion on LHX stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 19 analysts covering the stock, 10 recommend “Strong Buy,” one advocates “Moderate Buy,” seven advise “Hold,” and one suggests a “Strong Sell” rating.
The mean price target of $256.10 suggests a potential upside of 5.1% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
