Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💎 Access the Market Tools Trusted by Thousands of Investors Get Started
L3Harris Technologies downgraded at BofA on supply chain challenges
Published Nov 11, 2022 11:38AM ET
Updated Nov 11, 2022 11:52AM ET
© Reuters. L3Harris Technologies (LHX) downgraded at BofA on supply chain challenges
By Sam Boughedda
L3Harris Technologies (NYSE:LHX) was downgraded to Neutral from Buy with its price target cut to $250 from $285 by BofA analysts on Friday.
L3Harris shares are down over 6% the downgrade, which comes the day after Argus also downgraded the stock to Hold.
The analysts told investors in a note that the firm sees L3Harris as one of the defense companies most impacted by supply chain constraints. the company reported earnings at the end of October and the analysts said LHX management was able to provide some additional color regarding supply chain challenges on its earnings call, "highlighting that 25% of revenues are recognizable upon delivery as opposed to when costs are incurred."
"These hurdles along with other macro headwinds have amounted to a ~$250mn negative impact to FY22 revenues, of which the company has been able to offset 70% of the associated higher costs. On component shortages, LHX continues to feel the brunt of the impact given its position as a systems integrator," wrote the analysts.
He also pointed to Tactical Communications, one of the business units most impacted within the LHX portfolio, stating that LHX management noted that they can account for 97.5% of the necessary parts on its radios. "However, without all the necessary parts, the radios cannot deliver, and the revenue cannot be recognized (in some instances)," continued the analysts. "The company cited that out of 400 key suppliers, 10 remain on the watchlist (down from 30 in 1Q22)."
Despite Friday's decline, L3Harris shares are up over 4% in 2022.
Still, BofA's analysts explained that given the persistent supply chain challenges that have shown little sign of fading, they are downgrading the stock.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.