L3Harris Technologies (LHX) Could Be 17% Undervalued As Defense Orders Build

L3Harris Technologies (LHX) has just lined up a cluster of fresh defense work, including a $250 million GMLRS propulsion contract and a $106 million VAMPIRE order, putting recent stock moves in sharper context.

L3Harris Technologies’ latest contract wins and teaming agreements arrive after a mixed run in the market, with the share price rising 3.33% on the day to US$248.51 and gaining 4.87% over the past week, yet declining 11.42% over 90 days. That shorter term weakness sits alongside a softer 1 year total shareholder return of 11.00% and a much stronger 3 year total shareholder return of 49.49%, suggesting longer horizon holders have still seen meaningful value creation even as recent momentum has faded.

Scan for other defense contractors with similar contract momentum and manufacturing scale by checking our curated list of list of solid balance sheet and fundamentals (25 results) alongside the latest moves by L3Harris Technologies.

Fresh contract wins now sit against a share price that has slipped over the past year. Does the current valuation still offer a favourable trade off for new buyers, or has most of the upside been used up?

Most Popular Narrative: 17.2% Undervalued

On the most followed view, L3Harris Technologies carries a fair value of $300 per share against the last close at $248.51, which puts the current pullback against a valuation backdrop that still points to potential upside in that framework.

L3Harris Technologies may not be a bargain, and expectations for returns from here may be moderate. However, as a long-term defence holding, the investment case appears stronger today than it did 12 months ago.

See why 1 investors see L3Harris Technologies as 17% undervalued.

Result: Fair Value of $300 (UNDERVALUED)

Still, L3Harris Technologies faces real pressure if defence budgets slow or key programs are delayed, which could challenge both the backlog story and current valuation support.

Find out about the key risks to this L3Harris Technologies narrative.

Next Steps

If the mixed tone on L3Harris Technologies leaves you split between caution and optimism, move fast and weigh both sides for yourself with 6 key rewards and 1 important warning sign

Looking for more L3Harris Technologies investment ideas?

If L3Harris Technologies has sharpened your focus on defence and quality, do not stop here. Broaden your watchlist with curated ideas built from hard data.

• Target resilient, lower volatility opportunities by scanning the 32 resilient stocks with low risk scores that may help steady your portfolio when sentiment turns.
• Zero in on quality at a sensible price by reviewing the 33 high quality undervalued stocks before other investors start paying closer attention.
• Spot future leaders early by working through the 20 high quality undiscovered gems that rarely appear on mainstream radars but already carry solid fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com