L3Harris Technologies, Inc. (LDOS) Stock Analysis
By stockpickr AI | March 3, 2026 | 10 min read
Investment Summary
L3Harris Technologies (Industrials) appears slightly undervalued based on the assumption-driven DCF analysis, supported by stable defense sector demand and strong backlog, although management of integration risk remains critical.
Investment Recommendation
Hold
Fair Value: $246.50
Current Price: $235.82
Upside/Downside: +4.52%
The DCF analysis suggests a fair value slightly above the current market price of $235.82, indicating minor undervaluation (+4.5% upside). This positioning, combined with strong defense fundamentals and moderate profitability metrics, warrants a Hold rating pending clearer visibility on synergy capture and commercial segment stability.
Key Metrics
- Market Cap: $43.10B
- P/E Ratio: 23.07x
- Forward P/E: 19.92x
- Revenue Growth (YoY): 14.0%
- Net Margin: 8.0%
- ROE: 11.5%
- Debt/Equity: 0.43
- Dividend Yield: 1.54%
Strengths
- Robust backlog provides high revenue visibility, exceeding $24 billion as of recent filings.
- Strong positioning in high-growth defense modernization areas (e.g., EW, Space, C5ISR).
- Solid operational execution, achieving a healthy consolidated operating margin above competitive levels.
- Steady dividend growth history, providing income appeal for long-term investors.
Risk Factors
- Integration complexity and potential realization delays from recent large-scale M&A activities.
- Reliance on U.S. government and allied nation contracts, which are subject to political and budgetary risks.
- Exposure to supply chain constraints and inflation, potentially compressing margins on fixed-price government contracts.