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L3Harris Technologies, Inc. (LHX) is a prominent player in the global aerospace and defense industry, boasting a market capitalization of $46.5 billion. The Florida-based company excels in advanced communications, electronic systems, and space and airborne solutions, delivering mission-critical technologies and innovative services to government and commercial clients around the world.
Shares of LHX have underperformed the broader market over the past year. The stock has gained 30.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.8%. In 2024, LHX is up 16.5% compared to SPX’s 25.8% rise on a YTD basis.
Narrowing the focus, LHX has also outperformed compared to the SPDR S&P Aerospace & Defense ETF (XAR). The exchange-traded fund has gained about 37.5% over the past year. However, the ETF’s 28.3% gains on a YTD outshines the stock’s returns over the same time frame.
On Nov. 25, LHX saw its shares drop over 3% amid reports of a potential cease-fire between Israel and Hezbollah, which weighed on defense stocks.
Moreover, the stock fell over 5% on Nov. 14 following the announcement of a government spending cut commission led by Elon Musk and Vivek Ramaswamy, which put pressure on stocks with major government contracts.
For the current fiscal year, ending in December, analysts expect LHX’s EPS to grow 5.9% year over year to $13.09 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in all four quarters.
Among the 20 analysts covering LHX stock, the consensus rating is a “Moderate Buy.” That’s based on 13 “Strong Buy” ratings, one “Moderate Buy,” five “Holds,” and one “Strong Sell.”
This configuration is more bullish than a month ago, with 11 analysts suggesting a “Strong Buy.”
On Nov. 26, Argus analyst Kristina Ruggeri upgraded L3Harris Technologies to a “Buy” rating with a $300 price target, citing a favorable outlook due to geopolitical tensions. The firm highlights the company's record backlog, government contracts, cost improvements, and rising demand as key growth drivers.
The mean price target is $277.45, representing a premium of 9% compared to LHX’s current price levels. The Street-high price target of $324 suggests an upside potential of 39.7%.
