On Monday, RBC Capital Markets adjusted its price target for L3Harris Technologies (NYSE:LHX), increasing it to $265 from the previous $240. The firm sustained its Sector Perform rating on the stock. This revision follows the company's announcement of robust third-quarter results for the fiscal year 2024, featuring a 5% organic growth. L3Harris Technologies outperformed market expectations with an adjusted earnings per share (EPS) of $3.34, surpassing the consensus estimate of $3.25 by approximately 3%.
The favorable third-quarter financials demonstrated a significant improvement in Communication Systems (CS) margins and a robust revenue increase in both the CS and Integrated Mission Systems (IMS) segments. In light of these outcomes, L3Harris Technologies has upgraded its forecast for the full year 2024. Notably, the company is now projecting to achieve margins exceeding 16% by the year 2026.
The commendable financial performance is attributed to the company's effective execution in capitalizing on cost-saving opportunities. While the analyst from RBC Capital acknowledged these positive developments, they also noted that the near-term potential of L3Harris Technologies is already accounted for in the current stock valuation. Consequently, the decision was made to uphold the Sector Perform rating while elevating the price target to reflect the company's recent achievements and improved financial guidance.
In other recent news, L3Harris Technologies has reported robust Q3 results, showcasing an 8% year-over-year revenue increase and solid free cash flow exceeding $700 million. The company has secured major contracts, including a $600 million Next Generation Jammer contract and a $1.2 billion IDIQ contract with the U.S. Navy. A significant development is the strategic partnership with Palantir (NYSE:PLTR) to enhance supply chain management and digital infrastructure.
The company has raised its full-year revenue guidance to between $21.1 billion and $21.3 billion and expects earnings per share (EPS) to range from $12.95 to $13.15. It is on track to exceed its 2024 cost savings target of $400 million, now expecting at least $600 million. L3Harris Technologies is optimistic about growth opportunities, particularly in the defense sector.
Despite some operational challenges, the company has achieved strong margins, with the CS segment delivering a 26% increase. It is committed to meeting mission-critical needs amidst a complex global threat environment. With a strong book-to-bill ratio and record backlog, L3Harris Technologies is well-positioned to capitalize on growth opportunities.
InvestingPro Insights
L3Harris Technologies' strong performance, as highlighted in the article, is further supported by recent data from InvestingPro. The company's market capitalization stands at $47.95 billion, reflecting its significant presence in the Aerospace & Defense industry. L3Harris has demonstrated impressive revenue growth, with a 13.32% increase over the last twelve months as of Q3 2024, and a 7.67% quarterly growth in Q3 2024. This aligns with the 5% organic growth mentioned in the article.
InvestingPro Tips reveal that L3Harris has raised its dividend for 23 consecutive years, underscoring its commitment to shareholder returns. This is particularly noteworthy given the company's strong financial performance and upgraded forecast mentioned in the article. Additionally, the stock is trading near its 52-week high, with a substantial 51.14% price total return over the past year, indicating investor confidence in the company's trajectory.
For readers interested in a deeper analysis, InvestingPro offers 8 additional tips that could provide further insights into L3Harris Technologies' financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.