L3Harris stock price target raised to $270 at TD Cowen

On Friday, TD Cowen demonstrated a positive outlook on L3Harris Technologies (NYSE:LHX), as analyst Gautam Khanna increased the company’s price target from $240.00 to $270.00. Khanna affirmed a Buy rating on the stock, citing improved order momentum and the progression of previously delayed programs as key factors. According to InvestingPro data, analyst targets for L3Harris range from $212 to $324, with the stock currently trading near $244. The company’s strong financial health score and recent performance, showing a 16.4% gain year-to-date, support this positive outlook.

Khanna’s optimism is rooted in L3Harris’s C26 targets, which include $23 billion in sales, $2.8 billion in free cash flow (FCF), and a 16% margin. These targets, presented at a competitor conference, now appear more achievable to the analyst, contrasting with earlier views and prevailing market skepticism. The updated sales target suggests a 6.7% growth from the C25 midpoint, which is more optimistic than the Street’s consensus of $22.7 billion in C26 sales. InvestingPro data shows the company’s current revenue at $21.25 billion with a 5.39% growth rate, demonstrating steady progress toward these targets. The company maintains strong profitability metrics, including a 26% gross margin.

The analyst also mentioned the Golden Dome ("GD") theme as an additional aspect of the investment thesis for L3Harris. Although details of the GD program are currently vague, Khanna believes that L3Harris stock represents a way for investors to engage with this theme.

L3Harris Technologies has been experiencing an upward trend in orders, with expectations of a 1.5 times book-to-bill (B/B) ratio in the second quarter. This measure indicates the company’s ability to increase its backlog of orders and is often seen as a positive sign of demand and future revenue growth.

The affirmation of the C26 targets by L3Harris management has contributed to the more favorable view of the company’s financial trajectory. The targets reflect significant confidence in the company’s growth and operational efficiency moving forward.

In other recent news, L3Harris Technologies has been in the spotlight with several significant developments. The company received an upgrade from Bernstein, which raised its stock rating to ’Outperform’ and increased the price target to $273.00. This move reflects Bernstein’s confidence in L3Harris’s growth prospects and its ability to perform better than the market average. Additionally, L3Harris has secured $214 million in orders from Germany, aimed at enhancing the operational capabilities of the German armed forces through advanced communication systems.

JPMorgan has maintained its ’Overweight’ rating for L3Harris, with a price target of $255.00, following the company’s involvement in the Golden Dome defense program. The company recently completed a $125 million expansion at its Fort Wayne facility, which has been crucial in securing contracts for various defense initiatives. Despite a recent earnings report indicating lower-than-expected revenues, Bernstein SocGen maintained its positive outlook on L3Harris, citing strong fundamentals and resilience in the face of strategic changes.

These recent developments suggest that L3Harris Technologies is positioned to continue its role as a significant player in the defense sector. The company’s ongoing projects and strategic initiatives are likely to be closely watched by investors and market analysts.

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