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Wells Fargo set its target for the stock at $375 on Tuesday. This is notably higher than the average analyst target of about $337 and sits well above the current price of $261. While a price target is just one firm's estimate of what the stock should cost, it reflects confidence in the company's ability to turn its record $53 billion backlog into actual sales. L3Harris is currently expanding its manufacturing capacity to meet high demand for missile propulsion and space defense systems.
Source: Wells Fargo
L3Harris received 121 million dollars in orders to supply the U.S. Army with its low-cost data radio system. These radios are designed to fit into existing vehicle kits, making it faster and cheaper for the military to upgrade its communication tools across the fleet.
While this is a smaller deal compared to the company's 53 billion dollar total backlog, it shows L3Harris continues to win steady, high-margin work in its core communications business. This helps balance out the longer-term, more complex rocket and space projects that drive the company's growth.
Source: Business Wire
After L3Harris Technologies reported its October results, we updated our fair value and cut our quality score to 3.6. We lowered our rating for the management team and how well the business is protected from rivals, but raised our score for its future growth room. We added the sudden change in leadership and potential impacts from new trade tariffs to the risks we track. We also adjusted our revenue projections to account for the sale of the commercial aviation and space technology units.
L3Harris earned $3.28 per share this quarter, beating the $2.95 analysts expected. Revenue rose to about $6.1 billion as the company successfully turned more of its signed orders into sales. The stock rose 7 percent following the news, which showed the company is getting better at managing its costs while meeting high demand for military equipment.
The most important detail for long-term owners is the record $53.2 billion backlog, which represents the total value of signed contracts waiting to be fulfilled. This massive pile of work gives the company years of predictable revenue. Management also raised its profit and sales targets for the full year, signaling confidence that they can keep up this pace of production through the end of 2026.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
L3Harris will pay its next quarterly dividend of $1.25 per share on December 18. This is a routine payment for the company, which uses a portion of its profits to reward shareholders. For a long-term owner, this confirms the company is continuing to return cash as expected while it works on paying down debt from its recent acquisitions.
Source: Business Wire
Management has beaten profit targets for eight straight quarters, often by wide margins, which shows they are consistently underestimating how quickly their new missile and space contracts can grow.
| Expectation | |
|---|---|
| EPS | $3.17 |
| Revenue | $5.99B |
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