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

Sector: Industrials Industry: Aerospace & Defense CIK: 0000202058
Market Cap 43.41 Bn
P/B 14.20
P/E 133.97
P/S 7.24
ROIC (Qtr) 5.95
Div Yield % 0.92
Rev 1y % (Qtr) 6.93
Total Debt (Qtr) 11.72 Bn
Debt/Equity (Qtr) 0.60

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 2.27B provides exceptional 757.67x coverage of minority interest expenses 3M, showing strong core operations.
  • Tangible assets of 13.57B provide exceptional 6.08x coverage of deferred revenue 2.23B, showing strong service capability backing.
  • Robust free cash flow of 1.89B exceeds capital expenditure of 383M by 4.93x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 13.57B provides 14.21x coverage of working capital 955M, indicating strong operational backing.
  • Operating cash flow of 2.27B fully covers other non-current liabilities 1.62B by 1.41x, showing strong long-term stability.

Bear case

  • With cash reserves of 339M against inventory of 1.29B, the 0.26 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 2.27B provides thin coverage of dividend payments of (899M) with a -2.53 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 339M provide limited coverage of acquisition spending of 946M, which is 0.36x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 2.27B provides insufficient coverage of deferred revenue obligations of 2.23B, which is 1.02x, raising concerns about future service delivery capabilities.
  • Operating earnings of 2.65B show weak coverage of depreciation charges of 1.24B, with a 2.14 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

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 340.73 Bn 39.15 7.43 20.49 Bn
2 RTX RTX Corp 266.41 Bn 39.57 3.01 39.51 Bn
3 BA Boeing Co 184.47 Bn 97.60 2.06 54.10 Bn
4 LMT Lockheed Martin Corp 145.11 Bn 28.92 1.93 21.70 Bn
5 HWM Howmet Aerospace Inc. 107.72 Bn 167.79 15.89 3.19 Bn
6 GD General Dynamics Corp 104.16 Bn 30.88 2.67 8.01 Bn
7 NOC Northrop Grumman Corp /De/ 101.77 Bn 24.33 2.43 17.02 Bn
8 TDG TransDigm Group INC 74.73 Bn 41.34 8.20 30.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.17 3.14
EV to Cash from Ops. EV/CFO 51.84 76.41
EV to Debt EV to Debt 4.09 80.89
EV to EBIT EV/EBIT 61.41 11.31
EV to EBITDA EV/EBITDA 37.30 30.07
EV to Free Cash Flow [EV/FCF] EV/FCF 62.04 86.36
EV to Market Cap EV to Market Cap 1.10 1.07
EV to Revenue EV/Rev 7.99 10.58
Price to Book Value [P/B] P/B 14.20 5.81
Price to Earnings [P/E] P/E 133.97 18.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.96 -3.22
Dividend Payout Ratio % Div Payout % (Qtr) 50.90 19.41
Dividend per Basic Share Div per Share (Qtr) 4.76 0.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 47.12 11.64
Interest Coverage Int. cover (Qtr) 4.31 -13.61
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.23 -65.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -37.11 1,593.29
Dividend Growth (1y) % Div 1y % (Qtr) 3.03 1.86
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 21.23 -43.11
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 25.18 19.42
EBIT Growth (1y) % EBIT 1y % (Qtr) 39.72 -34.51
EBT Growth (1y) % EBT 1y % (Qtr) 67.96 -35.59
EPS Growth (1y) % EPS 1y % (Qtr) 47.01 -112.67
FCF Growth (1y) % FCF 1y % (Qtr) 2.27 27.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.07 -0.19
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.53 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.34 0.03
Cash Ratio Cash Ratio (Qtr) 0.05 1.78
Current Ratio Curr Ratio (Qtr) 1.14 3.63
Debt to Equity Ratio Debt/Equity (Qtr) 0.60 0.29
Interest Cover Ratio Int Coverage (Qtr) 4.31 -13.61
Times Interest Earned Times Interest Earned (Qtr) 4.31 -13.61
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.90 -345.58
EBIT Margin % EBIT Margin % (Qtr) 12.18 -382.34
EBT Margin % EBT Margin % (Qtr) 9.36 -387.64
Gross Margin % Gross Margin % (Qtr) 25.60 -33.21
Net Profit Margin % Net Margin % (Qtr) 8.10 -388.96