L3HARRIS TECHNOLOGIES INC (LHX) Stock Fundamental Analysis
NYSE:LHX - New York Stock Exchange, Inc. - US5024311095 - Common Stock
LHX gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. While LHX is still in line with the averages on profitability rating, there are concerns on its financial health. LHX has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
LHX had positive earnings in the past year.
In the past year LHX had a positive cash flow from operations.
Each year in the past 5 years LHX has been profitable.
In the past 5 years LHX always reported a positive cash flow from operatings.
1.2 Ratios
LHX's Return On Assets of 2.88% is in line compared to the rest of the industry. LHX outperforms 51.56% of its industry peers.
LHX has a Return On Equity of 6.35%. This is comparable to the rest of the industry: LHX outperforms 53.13% of its industry peers.
LHX's Return On Invested Capital of 6.00% is in line compared to the rest of the industry. LHX outperforms 56.25% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LHX is in line with the industry average of 7.66%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 6.35% | ||
| ROIC | 6% |
ROA(3y)3.81%
ROA(5y)4.76%
ROE(3y)7.29%
ROE(5y)11.09%
ROIC(3y)6.33%
ROIC(5y)7.4%
1.3 Margins
Looking at the Profit Margin, with a value of 5.71%, LHX is in line with its industry, outperforming 54.69% of the companies in the same industry.
In the last couple of years the Profit Margin of LHX has declined.
LHX has a Operating Margin of 10.98%. This is in the better half of the industry: LHX outperforms 78.13% of its industry peers.
In the last couple of years the Operating Margin of LHX has declined.
Looking at the Gross Margin, with a value of 26.17%, LHX is in the better half of the industry, outperforming 60.94% of the companies in the same industry.
LHX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.98% | ||
| PM (TTM) | 5.71% | ||
| GM | 26.17% |
OM growth 3Y0.13%
OM growth 5Y-5.87%
PM growth 3Y0.9%
PM growth 5Y-10.98%
GM growth 3Y-3.36%
GM growth 5Y-5.03%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LHX is destroying value.
LHX has less shares outstanding than it did 1 year ago.
LHX has more shares outstanding than it did 5 years ago.
LHX has a worse debt/assets ratio than last year.
2.2 Solvency
LHX has an Altman-Z score of 1.92. This is not the best score and indicates that LHX is in the grey zone with still only limited risk for bankruptcy at the moment.
LHX has a worse Altman-Z score (1.92) than 71.88% of its industry peers.
The Debt to FCF ratio of LHX is 7.20, which is on the high side as it means it would take LHX, 7.20 years of fcf income to pay off all of its debts.
LHX has a Debt to FCF ratio of 7.20. This is in the better half of the industry: LHX outperforms 67.19% of its industry peers.
LHX has a Debt/Equity ratio of 0.65. This is a neutral value indicating LHX is somewhat dependend on debt financing.
LHX's Debt to Equity ratio of 0.65 is on the low side compared to the rest of the industry. LHX is outperformed by 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 7.2 | ||
| Altman-Z | 1.92 |
ROIC/WACC0.6
WACC10.06%
2.3 Liquidity
LHX has a Current Ratio of 1.04. This is a normal value and indicates that LHX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.04, LHX is doing worse than 81.25% of the companies in the same industry.
A Quick Ratio of 0.87 indicates that LHX may have some problems paying its short term obligations.
LHX has a Quick ratio of 0.87. This is in the lower half of the industry: LHX underperforms 70.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
LHX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.70%.
The Earnings Per Share has been growing slightly by 2.25% on average over the past years.
LHX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.32%.
LHX shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.78% yearly.
EPS 1Y (TTM)5.7%
EPS 3Y2.14%
EPS 5Y2.25%
EPS Q2Q%4.7%
Revenue 1Y (TTM)13.32%
Revenue growth 3Y2.2%
Revenue growth 5Y25.78%
Sales Q2Q%7.67%
3.2 Future
The Earnings Per Share is expected to grow by 8.53% on average over the next years. This is quite good.
Based on estimates for the next years, LHX will show a small growth in Revenue. The Revenue will grow by 6.54% on average per year.
EPS Next Y6.95%
EPS Next 2Y8.39%
EPS Next 3Y8.95%
EPS Next 5Y8.53%
Revenue Next Year9.63%
Revenue Next 2Y6.21%
Revenue Next 3Y5.82%
Revenue Next 5Y6.54%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.16, LHX is valued on the expensive side.
Based on the Price/Earnings ratio, LHX is valued cheaper than 90.63% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, LHX is valued a bit cheaper.
A Price/Forward Earnings ratio of 15.34 indicates a correct valuation of LHX.
Based on the Price/Forward Earnings ratio, LHX is valued cheaper than 93.75% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of LHX to the average of the S&P500 Index (24.44), we can say LHX is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.16 | ||
| Fwd PE | 15.34 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LHX indicates a rather cheap valuation: LHX is cheaper than 81.25% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, LHX is valued cheaper than 95.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.59 | ||
| EV/EBITDA | 14.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)2.47
PEG (5Y)7.63
EPS Next 2Y8.39%
EPS Next 3Y8.95%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.12%, LHX has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.36, LHX pays a better dividend. On top of this LHX pays more dividend than 93.75% of the companies listed in the same industry.
LHX's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.12% |
5.2 History
The dividend of LHX is nicely growing with an annual growth rate of 16.34%!
LHX has paid a dividend for at least 10 years, which is a reliable track record.
LHX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.34%
Div Incr Years21
Div Non Decr Years24
5.3 Sustainability
LHX pays out 72.99% of its income as dividend. This is not a sustainable payout ratio.
LHX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP72.99%
EPS Next 2Y8.39%
EPS Next 3Y8.95%
L3HARRIS TECHNOLOGIES INC
NYSE:LHX (1/21/2025, 8:11:51 PM)
After market: 226.499 +3.64 (+1.63%)222.86
+4.7 (+2.15%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners85.65%
Inst Owner Change-0.07%
Ins Owners0.31%
Ins Owner Change-1.3%
Market Cap42.27B
Analysts77.24
Price Target281.25 (26.2%)
Short Float %1.24%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.12% |
Yearly Dividend4.56
Dividend Growth(5Y)16.34%
DP72.99%
Div Incr Years21
Div Non Decr Years24
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.24%
Min EPS beat(2)0.97%
Max EPS beat(2)1.5%
EPS beat(4)4
Avg EPS beat(4)1.75%
Min EPS beat(4)0.09%
Max EPS beat(4)4.46%
EPS beat(8)5
Avg EPS beat(8)1.23%
EPS beat(12)8
Avg EPS beat(12)0.6%
EPS beat(16)11
Avg EPS beat(16)1.03%
Revenue beat(2)0
Avg Revenue beat(2)-0.86%
Min Revenue beat(2)-0.97%
Max Revenue beat(2)-0.75%
Revenue beat(4)1
Avg Revenue beat(4)-0.18%
Min Revenue beat(4)-0.97%
Max Revenue beat(4)1.05%
Revenue beat(8)5
Avg Revenue beat(8)2.03%
Revenue beat(12)5
Avg Revenue beat(12)0.24%
Revenue beat(16)5
Avg Revenue beat(16)-0.67%
PT rev (1m)-0.65%
PT rev (3m)9.29%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.6%
EPS NY rev (1m)0%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.63%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.16 | ||
| Fwd PE | 15.34 | ||
| P/S | 2 | ||
| P/FCF | 23.59 | ||
| P/OCF | 19.05 | ||
| P/B | 2.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.71 |
EPS(TTM)12.99
EY5.83%
EPS(NY)14.53
Fwd EY6.52%
FCF(TTM)9.45
FCFY4.24%
OCF(TTM)11.7
OCFY5.25%
SpS111.47
BVpS100.16
TBVpS-49.08
PEG (NY)2.47
PEG (5Y)7.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 6.35% | ||
| ROCE | 6.85% | ||
| ROIC | 6% | ||
| ROICexc | 6.1% | ||
| ROICexgc | 33.72% | ||
| OM | 10.98% | ||
| PM (TTM) | 5.71% | ||
| GM | 26.17% | ||
| FCFM | 8.48% |
ROA(3y)3.81%
ROA(5y)4.76%
ROE(3y)7.29%
ROE(5y)11.09%
ROIC(3y)6.33%
ROIC(5y)7.4%
ROICexc(3y)6.51%
ROICexc(5y)7.73%
ROICexgc(3y)43.3%
ROICexgc(5y)50.1%
ROCE(3y)7.08%
ROCE(5y)8.25%
ROICexcg growth 3Y-6.98%
ROICexcg growth 5Y-11.73%
ROICexc growth 3Y-1%
ROICexc growth 5Y-12.2%
OM growth 3Y0.13%
OM growth 5Y-5.87%
PM growth 3Y0.9%
PM growth 5Y-10.98%
GM growth 3Y-3.36%
GM growth 5Y-5.03%
F-Score6
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 7.2 | ||
| Debt/EBITDA | 3.38 | ||
| Cap/Depr | 32.52% | ||
| Cap/Sales | 2.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 61.05% | ||
| Profit Quality | 148.47% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.92 |
F-Score6
WACC10.06%
ROIC/WACC0.6
Cap/Depr(3y)33.58%
Cap/Depr(5y)39.76%
Cap/Sales(3y)1.9%
Cap/Sales(5y)2.02%
Profit Quality(3y)146.91%
Profit Quality(5y)153.06%
High Growth Momentum
Growth
EPS 1Y (TTM)5.7%
EPS 3Y2.14%
EPS 5Y2.25%
EPS Q2Q%4.7%
EPS Next Y6.95%
EPS Next 2Y8.39%
EPS Next 3Y8.95%
EPS Next 5Y8.53%
Revenue 1Y (TTM)13.32%
Revenue growth 3Y2.2%
Revenue growth 5Y25.78%
Sales Q2Q%7.67%
Revenue Next Year9.63%
Revenue Next 2Y6.21%
Revenue Next 3Y5.82%
Revenue Next 5Y6.54%
EBIT growth 1Y13.32%
EBIT growth 3Y2.33%
EBIT growth 5Y18.39%
EBIT Next Year40.78%
EBIT Next 3Y16.54%
EBIT Next 5Y13.96%
FCF growth 1Y-4.78%
FCF growth 3Y-12.06%
FCF growth 5Y21.78%
OCF growth 1Y0.96%
OCF growth 3Y-9.09%
OCF growth 5Y22.79%