L3Harris (LHX) Valuation After Major Space Contract Win and Morgan Stanley Upgrade

L3Harris Technologies (LHX) just landed an up to $843 million Space Development Agency contract to build 18 infrared tracking satellites, along with a fresh upgrade from Morgan Stanley, prompting investors to reassess the stock’s potential.

See our latest analysis for L3Harris Technologies.

That backdrop helps explain why the share price has climbed strongly this year, with a year to date share price return of 38.62% and a five year total shareholder return of 71.88%, suggesting momentum is building as new defense and space contracts stack up.

If this contract win has you rethinking your defense exposure, it could be a good moment to explore aerospace and defense stocks for other potential opportunities in the space.

Yet with the stock up sharply and trading at a discount to bullish analyst targets and some intrinsic value estimates, investors face a key question: Is L3Harris still mispriced, or is the market already baking in the next leg of growth?

Most Popular Narrative Narrative: 14% Undervalued

With L3Harris closing at $287.45 versus a narrative fair value near $334, the story centers on steadily rising earnings power and disciplined discounting of future cash flows.

The analysts have a consensus price target of $299.737 for L3Harris Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $327.0, and the most bearish reporting a price target of $250.0.

Read the complete narrative.

Want to unpack why moderate revenue growth, wider margins and a richer future earnings multiple still justify a higher price than today? The narrative spells it out.

Result: Fair Value of $334.16 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent budget uncertainty and execution risks on large fixed price programs could quickly challenge both the growth outlook and today’s undervaluation narrative.

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

Build Your Own L3Harris Technologies Narrative

If you see the outlook differently or would rather dive into the numbers yourself, you can build a custom narrative in just minutes: Do it your way.

A great starting point for your L3Harris Technologies research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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