L3Harris Technologies, Inc. /De/ (NYSE: LHX)

Sector: Industrials Industry: Aerospace & Defense CIK: 0000202058
Market Cap 64.95 Bn
P/B 3.31
P/E 40.44
P/S 2.97
ROIC (Qtr) 5.40
Div Yield % 1.38
Rev 1y % (Qtr) 2.26
Total Debt (Qtr) 10.44 Bn
Debt/Equity (Qtr) 0.53
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About

Investment thesis

Bull case

  • Tangible assets of 14.68B provide exceptional 6.49x coverage of deferred revenue 2.26B, showing strong service capability backing.
  • Robust free cash flow of 2.68B exceeds capital expenditure of 424M by 6.33x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 14.68B provides 10.74x coverage of working capital 1.37B, indicating strong operational backing.
  • Operating cash flow of 3.11B fully covers other non-current liabilities 1.63B by 1.91x, showing strong long-term stability.
  • Operating cash flow of 3.11B provides strong 2.55x coverage of inventory 1.22B, indicating efficient inventory management.

Bear case

  • Operating cash flow of 3.11B provides thin coverage of dividend payments of (903M) with a -3.44 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.07B provide limited coverage of acquisition spending of 820M, which is 1.30x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 3.11B provides insufficient coverage of deferred revenue obligations of 2.26B, which is 1.37x, raising concerns about future service delivery capabilities.
  • Operating earnings of 2.53B show weak coverage of depreciation charges of 1.22B, with a 2.07 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 2.68B represents just -2.37x of debt issuance (1.13B), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2026)

Segments Breakdown of Revenue (2026)

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 347.18 Bn 39.89 7.57 20.49 Bn
2 RTX RTX Corp 272.90 Bn 40.54 3.08 39.51 Bn
3 BA Boeing Co 185.24 Bn 98.01 2.07 54.10 Bn
4 LMT Lockheed Martin Corp 151.16 Bn 30.13 2.01 21.70 Bn
5 NOC Northrop Grumman Corp /De/ 100.62 Bn 24.06 2.40 17.02 Bn
6 HWM Howmet Aerospace Inc. 99.61 Bn -156.86 7.95 3.05 Bn
7 GD General Dynamics Corp 94.33 Bn 27.82 2.39 8.01 Bn
8 TDG TransDigm Group INC 75.70 Bn 41.87 8.31 30.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.85 2.53
EV to Cash from Ops. EV/CFO 24.58 74.76
EV to Debt EV to Debt 7.31 70.01
EV to EBIT EV/EBIT 30.18 8.56
EV to EBITDA EV/EBITDA 22.90 28.68
EV to Free Cash Flow [EV/FCF] EV/FCF 28.46 73.68
EV to Market Cap EV to Market Cap 1.18 1.05
EV to Revenue EV/Rev 3.49 9.46
Price to Book Value [P/B] P/B 3.31 7.10
Price to Earnings [P/E] P/E 40.44 21.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.78 -3.71
Dividend Payout Ratio % Div Payout % (Qtr) 56.00 18.88
Dividend per Basic Share Div per Share (Qtr) 4.80 0.72
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 33.48 11.28
Interest Coverage Int. cover (Qtr) 4.24 -10.55
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.92 -77.00
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 73.82 27,757.82
Dividend Growth (1y) % Div 1y % (Qtr) 3.45 1.15
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -1.80 -9.06
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.96 11.61
EBIT Growth (1y) % EBIT 1y % (Qtr) 11.80 -0.09
EBT Growth (1y) % EBT 1y % (Qtr) 21.74 -31.50
EPS Growth (1y) % EPS 1y % (Qtr) 8.34 -100.94
FCF Growth (1y) % FCF 1y % (Qtr) 24.69 26.50
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.83 -1.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.53 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.26 0.03
Cash Ratio Cash Ratio (Qtr) 0.15 1.78
Current Ratio Curr Ratio (Qtr) 1.19 3.60
Debt to Equity Ratio Debt/Equity (Qtr) 0.53 0.32
Interest Cover Ratio Int Coverage (Qtr) 4.24 -10.55
Times Interest Earned Times Interest Earned (Qtr) 4.24 -10.55
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.20 -309.23
EBIT Margin % EBIT Margin % (Qtr) 11.57 -340.98
EBT Margin % EBT Margin % (Qtr) 8.84 -345.99
Gross Margin % Gross Margin % (Qtr) 25.70 -51.92
Net Profit Margin % Net Margin % (Qtr) 7.30 -347.41