L3Harris Technologies, Inc. (LHX) stock analysis

P/E below its 5-year median

L3Harris Technologies's P/E of 25.3 is below its own 5-year median of 32.6.

P/E below the industry

L3Harris Technologies's P/E of 25.3 is below the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 30.0.

EV/EBITDA below its 5-year median

L3Harris Technologies's EV/EBITDA of 11.0 is below its 5-year median of 17.7.

P/B below the industry

L3Harris Technologies's price-to-book of 2.50 is below the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 3.29.

Trading below fair value

The share price of $271.84 is below our fair value estimate of $349.39.

Margin of safety over 20%

The price is 22.2% below fair value, more than the 20% cushion we look for.

Revenue growth over 3 years

Needs three years of positive revenue.

EPS growing 10%+ a year

Diluted EPS grew 15.8% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 16.2% over the last twelve months, against a 5-year average of 11.1% a year.

Growing slower than the industry

Revenue grew 5.3% over the last twelve months; the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median is 8.6%.

Guidance raised

L3Harris Technologies raised its 2026 Guidance Diluted EPS outlook on Jul 29, 2026.

Gross margin slipping

Gross margin was 25.6% over the last twelve months, against 25.8% a year earlier.

Return on equity under 15%

Return on equity was 10.3% over the last twelve months and averaged 8.9% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 12.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

L3Harris Technologies's return on equity of 10.3% is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 9.5%.

Earnings grew over 5 years

Net income grew 11.1% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 5.2% over the last twelve months, against a 5-year average of 7.5%.

Net margin below the industry

L3Harris Technologies's net margin of 5.2% is below the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 9.4%.

High debt

Debt is 54.3% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 105% five years ago to 54.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 38.1% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.20 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.77; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

L3Harris Technologies paid dividends worth 1.8% of the share price over the last twelve months.

Yield below Treasuries

The 1.8% yield is below the 4.6% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.9% or more; L3Harris Technologies yields 1.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 5 fiscal years.

Covered by earnings

Dividends take 45.5% of net income.

Covered by free cash flow

Dividends take 25.5% of free cash flow.