L3Harris stock swung higher early Friday after receiving a double upgrade from Goldman Sachs. Meanwhile, defense spending rose in Q1.
Goldman Sachs on Friday upgraded L3Harris Technologies stock to buy from sell, and hiked its price target to 263 from 198, according to reports. L3Harris has a "relatively more dynamic business that is agile" to the evolving needs and makeup of the Department of Defense, the firm wrote. The equipment, parts and tech provider is "program agnostic," Goldman said — its systems are not tied to a specific platform or program. Meanwhile, L3Harris' portfolio is aligned with high-growth parts of the DoD's budget.
Goldman said it expects L3Harris to outgrow peers and drive best-in-class margins, adding that LHX's stock valuation is "attractive on a relative basis."
Elsewhere, Citi on Thursday lowered its price target on LHX stock to 245 from 285 but kept a buy rating on the shares.
Defense companies should have little exposure to tariffs. Citi, in a note on Thursday, said it remains constructive on the global defense spending outlook. Still, suppliers could see margin pressure and jet manufacturers will likely see near-term cost pressure due to imports from Canada and Mexico.
Meanwhile, U.S. defense spending increased 7% for the first quarter, William Blair reported on Thursday. Operations and maintenance spending was up 7% for the period, with an 11% increase in research and development spend. Procurement spending grew 4% for Q1, which included an 18% year-over-year increase for the month of March.
LHX stock climbed 2.3% early trade Friday, set to add to its 5.6% gain on the week.
Shares are holding above their 50-day moving average, but have yet to recover their 200-day line amid the market sell-off.
L3Harris is up 7.8% in 2025.
