Industrials · Equity Analysis

L3Harris Technologies Inc. (LHX) Stock Analysis — Price Target, Hold Rating & DCF Valuation (2026)

By Anton Ladnyi, CFA · ex-Goldman Sachs · ex-J.P. Morgan Published 2026-04-17 Updated 2026-05-30

LHX — L3Harris at ~$312 on ~27x FY2026E EPS ($11.40-11.60 raised) with Q1 2026 organic revenue +15% (best among primes), $40.7B record backlog, $1B DoW investment in Missile Solutions, confidential S-1 filed for Axyv (MSL) IPO targeting H2 2026 — the highest organic growth large-cap US defence play.

LHX Price Target & Rating

LHX's quantitative grade is Hold, with moderate downside risk (CVaR -15.6%), and quality metrics (net margin 10%). L3Harris Technologies Inc. (LHX) trades at $315.18 with a valuation grade of Hold: a trailing P/E of 34.3x at a 56% premium to sector median, net margins of 10.4%, a DCF-implied intrinsic range of $267–$410 suggesting a +7% margin of safety, beta 0.75 (defensive risk profile).

DCF Valuation Range

Key Takeaways

Valuation: Hold grade — P/E 34.3x — DCF range $267–$410 implies +7% margin of safety
Risk: CVaR -15.6% (95th percentile, 1-month) indicates moderate tail exposure; beta of 0.75 amplifies broad market moves in both directions
Strengths: Size 4.0/5, 10% net margin dominate the factor profile
Catalyst: Axyv IPO pricing and investor reception (H2 2026); $25B MAC programmes converting to firm orders; Q2 FCF turning positive
Bear catalyst: Axyv IPO withdrawn; leverage concern triggers credit downgrade; organic growth decelerates below 8%

LHX — Quantitative Snapshot May 2026

RatingHold

Price$315.18

Why HoldHigh-quality business at a fully-priced valuation — limited margin for error on earnings

Main riskPremium multiple (34.3x P/E) demands consistent delivery

Tail riskCVaR -15.6% over one month at the 95th percentile

DCF range$267–$410 intrinsic range; margin of safety +7%

Best useCore large-cap Industrials holding — not a source of diversified sector exposure

Next watchEarnings delivery consistency and margin trajectory

Quantitative Factor Profile

Value: 2.0 / 5
Quality: 3.0 / 5
Momentum: 3.0 / 5
Volatility: 4.5 / 5
Size: 4.0 / 5

Key Metrics

LHX Key Metrics — L3Harris Technologies Inc. 2026
Metric	Value
Current Price	$315.18
P/E Ratio (TTM)	34.3x
Forward P/E	23.1x
P/S Ratio	4.6
EV/EBITDA	35.8
Beta	0.75
Net Margin	10.4%
Debt/Equity	34.6%
Dividend Yield	1.59%
CVaR (95%, 1M)	-15.6%
Market Cap	$58.7B

Analyst View

Anton Ladnyi, CFA · A.L. Capital Advisory Updated 2026-05-30

Rating Rationale

Investment Thesis

↑ Bull Case

Q1 2026 organic revenue +15% — highest among US large-cap primes; EPS $2.72 beat $2.58 consensus (+13%); all segments growing
Record $40.7B backlog plus $25B Munitions Acceleration Council programmes in negotiation — potential backlog doubling to $60-70B within 12 months
$1B Department of War investment in Missile Solutions (Axyv) closes April 23 — validates spinoff thesis; expands solid rocket motor capacity (PAC-3, THAAD, Tomahawk, Standard Missile)
Axyv IPO (H2 2026, confidential S-1 filed): crystallises MSL value separately from core LHX; 28% classified work growing as share of revenue
Multiple price target upgrades from BofA, Citi, Bernstein, Truist, Susquehanna, MS, JPM, UBS, RBC — broad analyst community becoming constructive
FY2026 guidance raised: revenue $23.0-23.5B, EPS $11.40-11.60, FCF ~$3.0B

↓ Bear Case

$11.0B long-term debt vs $590M cash — most leveraged balance sheet among large-cap primes; legacy Aerojet integration elevated leverage
Axyv IPO execution risk: market conditions, regulatory issues, or investor reception could delay or derail value unlock
Q1 FCF -$187M on timing; full-year $3B FCF requires strong H2 generation — execution dependent
Effective tax rate at 13.1% (vs 15.9% prior year) boosted Q1 EPS; normalised tax rate is a headwind in subsequent quarters

What Changes the Rating

↑ Catalyst: Axyv IPO prices above $20B valuation; classified revenue exceeds 35% of total; all MAC programmes awarded

↓ Stop / exit: Axyv IPO withdrawn; leverage concern triggers credit downgrade; organic growth decelerates below 8%

Anton’s personal note

LHX is not a name I am actively adding to. The business quality is real, but at 34x I am already paying for a lot of the future, and the margin of safety does not justify conviction-sized exposure. The DCF sits close to the current price — no compelling discount, no obvious overshoot. In that setup, everything rides on the next earnings report. That is the moment I am watching: whether the delivery justifies the multiple, or whether the stock needs to come in before the risk/reward works again. A pullback of 10–15% from here would open the margin of safety enough that I would want to add. An earnings miss at the current multiple would do the opposite — that would be the signal to reduce rather than wait.

— Anton Ladnyi, CFA

Earnings History

LHX Earnings History — EPS Surprise Rate 2026
Quarter	EPS Est.	EPS Actual	Surprise
Q1 2026	$2.57	$2.91	+13.0% ✓
Q4 2025	$2.76	$2.86	+3.6% ✓
Q3 2025	$2.57	$2.70	+5.1% ✓
Q2 2025	$2.50	$2.78	+11.3% ✓

Quarterly EPS — Estimate vs Actual

Earnings Projections

LHX Forward EPS Consensus Estimates 2026
Quarter	EPS Est.	YoY EPS	Analysts
Q2 2026	$2.84	+2.2%	10
Q3 2026	$3.03	+12.4%	10
Q4 2026	~$3.11	+8.7%	12
Q1 2027	~$3.41	+17.3%	14
~ Estimated from annual consensus — not a direct analyst survey

Earnings Projections — Consensus EPS Estimates

LHX vs. Sector Peers

LHX Peer Valuation Comparison 2026
Ticker	P/E (TTM)	Fwd P/E	Beta	CVaR-95	Net Margin
LHX	34.3x	23.1x	0.75	-15.6%	10.4%
LMT	25.7x	16.5x	0.10	-19.5%	6.4%
NOC	17.7x	18.7x	-0.11	-21.3%	10.8%
RTX	33.6x	23.8x	0.30	-12.8%	8.0%
GD	21.8x	19.1x	0.34	-7.7%	8.1%

DCF Scenario Analysis

Hover each scenario for detail · current price $315.18

▼

Bear Case

$258

-18.1%

Fwd P/E: 20.8x

4.0 revenue CAGR · 19.0 exit multiple

◆

Base Case

$372

+18.0%

Fwd P/E: 30.0x

10.0 revenue CAGR · 26.0 exit multiple

▲

Bull Case

$490

+55.5%

Fwd P/E: 39.5x

16.0 revenue CAGR · 32.0 exit multiple

Pairwise Correlation Matrix

1 of 10 peer pairs correlated above 0.60 — diversification benefit within this cluster is structurally limited.

Extended Analysis — Buy, Hold or Sell? Risk Factors. Portfolio Fit.

Is LHX a buy, hold, or sell?

LHX carries a valuation grade of Hold. The trailing P/E of 34.3 sits 56% above the Industrials sector median of 22.0x — a premium that demands sustained earnings delivery. Our discounted cash flow model produces an intrinsic range of $267–$410 — implying a +7% margin of safety at the current price of $315.18. The width of the DCF range reflects genuine uncertainty in the terminal growth rate assumption: the correct framework is a probability-weighted distribution over scenarios, not a single point estimate. See the DCF valuation framework for full methodology.

With a 12% beat rate on recent quarters, earnings predictability has been mixed. Analyst estimate revisions are trending upward.

What are LHX's key risk factors?

With a beta of 0.75, LHX exhibits a defensive risk profile relative to the broad market. The 95th-percentile CVaR of -15.6% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 1.6% of total portfolio loss in the worst 5% of months. Net margins stand at 10.4%. The balance sheet is conservatively leveraged at 35% debt-to-equity.

At 0.40, the put/call ratio skews bullish, with call buyers dominating recent flow. Implied volatility of 32.1% exceeds realized volatility of 22.4% by 10 points, suggesting options are pricing in elevated risk. Insiders have been net sellers to the tune of $56.8M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 1.6% of float, suggesting limited bearish conviction.

How does LHX fit in a diversified portfolio?

At typical HENRY portfolio weights — 10–20% of the equity allocation — LHX carries a beta of 0.75, meaning it amplifies broad market moves proportionally. The appropriate weight is not a function of conviction alone, but of the full covariance structure across all holdings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.

Among closely correlated names, LHX shows the strongest co-movement with NOC (0.64), RTX (0.58), GD (0.57). Investors seeking diversification should note these correlation dynamics when constructing multi-asset portfolios.

True portfolio risk is a function of the full covariance structure across all holdings — not individual stock metrics. The Portfolio Health Check quantifies this at the portfolio level: it surfaces hidden concentration, marginal CVaR contributions, and the degree to which your overall allocation deviates from an optimal risk-adjusted mandate. The LHX analysis here is a single node in that larger structure.

For the full transatlantic conviction hierarchy — including LHX's position sizing, conviction rating, and upside/risk case in the 2026 defence supercycle — see: Defence Spending 2026: The Transatlantic Allocation Case →

Investor FAQ

Is LHX a buy or sell in 2026?

L3Harris Technologies Inc. (LHX) carries a Hold quantitative rating from A.L. Capital Advisory, derived from Discounted Cash Flow intrinsic value analysis, five-factor model scoring (Value, Quality, Momentum, Volatility, Size), and CVaR tail risk measurement. At $315.18, the DCF midpoint margin of safety is +7% (intrinsic value range: $267 bear – $410 bull). Composite factor score: 3.3/5. Strongest factor: Volatility (4.5/5). Weakest factor: Value (2.0/5). Trailing P/E: 34.3x. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Portfolio Construction Framework →

What is the average analyst target price for LHX?

Wall Street consensus target for LHX: $381.95 (+21.2% upside from the current price of $315.18). The analyst target range spans $300.00 (most bearish) to $443.00 (most bullish). Consensus recommendation: Buy. Note that analyst price targets typically reflect a 12-month forward horizon and are derived from a blend of DCF, comparable-company, and sum-of-the-parts analysis. A.L. Capital Advisory’s quantitative Hold rating is produced independently — from DCF intrinsic value, five-factor model scores, and CVaR tail risk — and does not mechanically track Street consensus. When the two diverge, the divergence itself is informative: it can reflect differences in time horizon, valuation methodology, or the degree to which the current price already discounts the consensus case. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Monte Carlo Simulation Framework →

How does LHX score on Value, Quality, Momentum, Volatility, and Size?

LHX five-factor scores (A.L. Capital Advisory, 1–5 scale): Value 2.0/5 (below average) — measures current price versus DCF intrinsic range and trailing earnings multiples; Quality 3.0/5 (neutral) — captures profitability metrics including return on equity, net margin and net margin (10.4%); Momentum 3.0/5 (neutral) — reflects recent price trajectory and earnings surprise consistency; Volatility 4.5/5 (strong) — inverse measure derived from beta, where lower historical volatility earns a higher score; Size 4.0/5 (above average) — market capitalisation rank (mega-cap $1T+ scores 5/5). Composite: 3.3/5. Factor scores above 4.0 signal a tailwind in that dimension; below 2.0 signals a material headwind. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Black-Litterman Model →

What is LHX's tail risk and CVaR?

The 95th-percentile Conditional Value at Risk (CVaR) for LHX on a one-month horizon is -15.6%. CVaR represents the expected average loss in the worst 5% of monthly outcomes — a more conservative tail risk measure than standard VaR, which only marks the loss threshold. Beta of 0.75 indicates below-market volatility. For reference, a diversified S&P 500 ETF carries a one-month CVaR of roughly -8% to -12% in normal market conditions; individual equity CVaR is higher due to idiosyncratic risk. At the portfolio level, what matters is the marginal CVaR contribution of each holding — not its standalone figure. The A.L. Capital Advisory Portfolio Health Check quantifies each position's marginal tail-risk contribution across your entire holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: CVaR & Tail-Risk Methodology →

What is LHX's intrinsic value and DCF price target?

A.L. Capital Advisory's DCF model produces an intrinsic value range of $267 (bear case) to $410 (bull case) for L3Harris Technologies Inc. (LHX). At $315.18, the midpoint margin of safety is +7% (positive = discount to intrinsic mid; negative = premium). The bear-to-bull spread reflects genuine sensitivity to the two dominant DCF inputs: the terminal growth rate and WACC. Terminal value typically accounts for 60-80% of total intrinsic value in most equity DCF models, which is why a range is more analytically sound than a point estimate. The central analytical question is not what the DCF outputs as a single number but which growth trajectory the current market price already discounts. All DCF analysis follows CFA Institute standards and is conducted by Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework →

What would trigger a rating upgrade or downgrade for LHX?

Upgrade trigger: A price pullback that opens the margin of safety beyond +15% (approximately $227 based on the DCF bear case). Downgrade trigger: An earnings miss at current valuations (34.3x trailing P/E) where there is limited earnings cushion to absorb negative surprises; or a sustained reversal in the Quality and Momentum factor scores for two or more consecutive quarters. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Investment Policy Statement Framework →

How does LHX contribute to portfolio risk and diversification?

LHX carries a beta of 0.75 (low-volatility / defensive relative to the broad equity market). A beta above 1.0 means the position amplifies market moves in both directions at a typical portfolio weight. Strongest peer co-movement: NOC (0.64), RTX (0.58), GD (0.57). Holding LHX alongside these names in the same portfolio increases concentration risk. True portfolio risk is a function of the full covariance structure — a single stock's beta does not reveal its marginal contribution to portfolio tail loss. The A.L. Capital Advisory Portfolio Health Check quantifies concentration risk (Herfindahl-Hirschman Index), pairwise correlations, and marginal CVaR contribution across all your holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Ledoit-Wolf Covariance Framework →

What quantitative methodology does A.L. Capital Advisory use to analyse LHX?

A.L. Capital Advisory analyses L3Harris Technologies Inc. (LHX) using a four-component quantitative framework grounded in CFA Institute standards. (1) DCF Valuation: projects free cash flows under bear and bull assumptions, discounts at WACC to produce an intrinsic value range with margin-of-safety calculation. (2) Five-Factor Scoring: each equity is scored 1–5 on Value, Quality, Momentum, Volatility, and Size. (3) CVaR Tail Risk: 95th-percentile Conditional Value at Risk from historical simulation of daily returns on a one-month horizon. (4) Earnings Surprise Analysis: quarterly beat rate and magnitude are incorporated into the Momentum and Quality factor scores. The current Hold rating for LHX is the output of applying this complete framework to current data. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework → · CVaR & Tail-Risk Methodology →

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Valuation Framework

DCF Valuation Framework

Why terminal value drives 60–80% of equity intrinsic value — the mechanics behind P/E, EV/EBITDA, and how a 1% WACC shift moves high-multiple tech stocks ~25%.

Risk Framework

CVaR & Tail-Risk Methodology

Why variance understates downside risk in non-normal return distributions, and how Conditional Value at Risk corrects that blind spot for institutional-grade position sizing.

Allocation Framework

Black-Litterman Model

The Bayesian allocation model from Goldman Sachs — how equilibrium market returns are combined with explicit investor views to produce stable, diversified portfolios.

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Anton Ladnyi, CFA

Founder & Portfolio Architect — A.L. Capital Advisory

Ex-Goldman Sachs Equity Research · Ex-J.P. Morgan Wealth Management · CFA Charterholder

CFA Charter ↗ CFA L1 ↗ CFA L2 ↗ CFA L3 ↗ LinkedIn ↗ X ↗

Legal Disclaimer & Important Notices

This analysis is produced using a systematic quantitative framework applied to market data and does not constitute investment advice. Prose commentary is AI-assisted and generated from structured quantitative inputs. All data and metrics are as of 2026-05-30 and are point-in-time estimates subject to revision without notice. CVaR figures are based on historical simulation and do not guarantee future outcomes. DCF ranges and upgrade/downgrade triggers are forward-looking statements based on current assumptions and may not materialise. Past performance does not guarantee future results. This analysis does not account for individual circumstances, tax position, or investment objectives — consult a qualified financial advisor before making investment decisions. This content is intended for informational purposes only and does not constitute regulated investment advice under MiFID II or FCA guidelines. This content is not intended for US persons or residents of jurisdictions where its distribution would be contrary to local law or regulation. This service is not directed at residents of Finland, Sweden, Norway, Denmark, Iceland, or Poland. The author may hold long or short positions in securities mentioned in this analysis. Nothing on this page represents a solicitation to buy or sell any security. A.L. Capital Advisory is an independent private advisory practice and is not affiliated with L3Harris Technologies Inc.