L3HARRIS TECHNOLOGIES INC (LHX) Stock Fundamental Analysis
NYSE:LHX - New York Stock Exchange, Inc. - US5024311095 - Common Stock - Currency: USD
Taking everything into account, LHX scores 4 out of 10 in our fundamental rating. LHX was compared to 65 industry peers in the Aerospace & Defense industry. There are concerns on the financial health of LHX while its profitability can be described as average. LHX has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
LHX had positive earnings in the past year.
In the past year LHX had a positive cash flow from operations.
LHX had positive earnings in each of the past 5 years.
Each year in the past 5 years LHX had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.89%, LHX is in line with its industry, outperforming 60.00% of the companies in the same industry.
The Return On Equity of LHX (8.39%) is better than 63.08% of its industry peers.
With a Return On Invested Capital value of 5.51%, LHX perfoms like the industry average, outperforming 47.69% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LHX is below the industry average of 8.39%.
The last Return On Invested Capital (5.51%) for LHX is above the 3 year average (5.34%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 8.39% | ||
| ROIC | 5.51% |
ROA(3y)3.23%
ROA(5y)3.61%
ROE(3y)6.66%
ROE(5y)7%
ROIC(3y)5.34%
ROIC(5y)5.33%
1.3 Margins
LHX has a Profit Margin of 7.55%. This is in the better half of the industry: LHX outperforms 69.23% of its industry peers.
In the last couple of years the Profit Margin of LHX has declined.
With a decent Operating Margin value of 11.26%, LHX is doing good in the industry, outperforming 72.31% of the companies in the same industry.
LHX's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 26.01%, LHX perfoms like the industry average, outperforming 53.85% of the companies in the same industry.
LHX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.26% | ||
| PM (TTM) | 7.55% | ||
| GM | 26.01% |
OM growth 3Y-4.16%
OM growth 5Y-7.3%
PM growth 3Y-12.08%
PM growth 5Y-12.74%
GM growth 3Y-4.96%
GM growth 5Y-5.47%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LHX is destroying value.
The number of shares outstanding for LHX remains at a similar level compared to 1 year ago.
The number of shares outstanding for LHX has been increased compared to 5 years ago.
Compared to 1 year ago, LHX has an improved debt to assets ratio.
2.2 Solvency
LHX has an Altman-Z score of 2.08. This is not the best score and indicates that LHX is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.08, LHX is doing worse than 69.23% of the companies in the same industry.
LHX has a debt to FCF ratio of 5.40. This is a neutral value as LHX would need 5.40 years to pay back of all of its debts.
LHX's Debt to FCF ratio of 5.40 is fine compared to the rest of the industry. LHX outperforms 67.69% of its industry peers.
LHX has a Debt/Equity ratio of 0.60. This is a neutral value indicating LHX is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.60, LHX perfoms like the industry average, outperforming 44.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 5.4 | ||
| Altman-Z | 2.08 |
ROIC/WACC0.55
WACC10.01%
2.3 Liquidity
A Current Ratio of 1.02 indicates that LHX should not have too much problems paying its short term obligations.
LHX has a Current ratio of 1.02. This is amonst the worse of the industry: LHX underperforms 87.69% of its industry peers.
LHX has a Quick Ratio of 1.02. This is a bad value and indicates that LHX is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of LHX (0.85) is worse than 73.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
The earnings per share for LHX have decreased by -0.88% in the last year.
The Earnings Per Share has been growing slightly by 0.14% on average over the past years.
LHX shows a small growth in Revenue. In the last year, the Revenue has grown by 5.39%.
The Revenue has been growing by 25.68% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-0.88%
EPS 3Y0.41%
EPS 5Y0.14%
EPS Q2Q%-21.24%
Revenue 1Y (TTM)5.39%
Revenue growth 3Y6.18%
Revenue growth 5Y25.68%
Sales Q2Q%-1.52%
3.2 Future
LHX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.95% yearly.
LHX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.23% yearly.
EPS Next Y-19.25%
EPS Next 2Y-3.29%
EPS Next 3Y1.91%
EPS Next 5Y6.95%
Revenue Next Year1.2%
Revenue Next 2Y3.28%
Revenue Next 3Y3.76%
Revenue Next 5Y4.23%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.70, the valuation of LHX can be described as rather expensive.
Based on the Price/Earnings ratio, LHX is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.53. LHX is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 20.01, which indicates a rather expensive current valuation of LHX.
Based on the Price/Forward Earnings ratio, LHX is valued a bit cheaper than the industry average as 75.38% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of LHX to the average of the S&P500 Index (22.27), we can say LHX is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.7 | ||
| Fwd PE | 20.01 |
4.2 Price Multiples
LHX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LHX is cheaper than 70.77% of the companies in the same industry.
95.38% of the companies in the same industry are more expensive than LHX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.22 | ||
| EV/EBITDA | 15.52 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)137.18
EPS Next 2Y-3.29%
EPS Next 3Y1.91%
5. Dividend
5.1 Amount
LHX has a Yearly Dividend Yield of 1.98%.
LHX's Dividend Yield is rather good when compared to the industry average which is at 1.29. LHX pays more dividend than 92.31% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, LHX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
5.2 History
On average, the dividend of LHX grows each year by 16.34%, which is quite nice.
LHX has been paying a dividend for at least 10 years, so it has a reliable track record.
LHX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)16.34%
Div Incr Years21
Div Non Decr Years24
5.3 Sustainability
55.45% of the earnings are spent on dividend by LHX. This is a bit on the high side, but may be sustainable.
LHX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.45%
EPS Next 2Y-3.29%
EPS Next 3Y1.91%
245.41
+1.14 (+0.47%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners87.74%
Inst Owner Change0.85%
Ins Owners0.31%
Ins Owner Change3.61%
Market Cap45.88B
Analysts80
Price Target264.26 (7.68%)
Short Float %2.06%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
Yearly Dividend4.56
Dividend Growth(5Y)16.34%
DP55.45%
Div Incr Years21
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.75%
Min EPS beat(2)0.54%
Max EPS beat(2)2.95%
EPS beat(4)4
Avg EPS beat(4)1.49%
Min EPS beat(4)0.54%
Max EPS beat(4)2.95%
EPS beat(8)7
Avg EPS beat(8)1.83%
EPS beat(12)8
Avg EPS beat(12)0.77%
EPS beat(16)11
Avg EPS beat(16)0.76%
Revenue beat(2)0
Avg Revenue beat(2)-1.61%
Min Revenue beat(2)-2.6%
Max Revenue beat(2)-0.63%
Revenue beat(4)0
Avg Revenue beat(4)-1.24%
Min Revenue beat(4)-2.6%
Max Revenue beat(4)-0.63%
Revenue beat(8)3
Avg Revenue beat(8)0.57%
Revenue beat(12)5
Avg Revenue beat(12)0.45%
Revenue beat(16)5
Avg Revenue beat(16)-0.49%
PT rev (1m)1.57%
PT rev (3m)1.4%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)-6%
EPS NY rev (1m)-1.28%
EPS NY rev (3m)-4%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-3.18%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.7 | ||
| Fwd PE | 20.01 | ||
| P/S | 2.16 | ||
| P/FCF | 20.22 | ||
| P/OCF | 17.5 | ||
| P/B | 2.4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.52 |
EPS(TTM)12.46
EY5.08%
EPS(NY)12.26
Fwd EY5%
FCF(TTM)12.14
FCFY4.95%
OCF(TTM)14.02
OCFY5.71%
SpS113.65
BVpS102.33
TBVpS-46.29
PEG (NY)N/A
PEG (5Y)137.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | 8.39% | ||
| ROCE | 7.08% | ||
| ROIC | 5.51% | ||
| ROICexc | 5.59% | ||
| ROICexgc | 31.34% | ||
| OM | 11.26% | ||
| PM (TTM) | 7.55% | ||
| GM | 26.01% | ||
| FCFM | 10.68% |
ROA(3y)3.23%
ROA(5y)3.61%
ROE(3y)6.66%
ROE(5y)7%
ROIC(3y)5.34%
ROIC(5y)5.33%
ROICexc(3y)5.46%
ROICexc(5y)5.48%
ROICexgc(3y)34.15%
ROICexgc(5y)35.26%
ROCE(3y)6.89%
ROCE(5y)6.83%
ROICexcg growth 3Y-9.8%
ROICexcg growth 5Y-16.22%
ROICexc growth 3Y-3.5%
ROICexc growth 5Y-14.2%
OM growth 3Y-4.16%
OM growth 5Y-7.3%
PM growth 3Y-12.08%
PM growth 5Y-12.74%
GM growth 3Y-4.96%
GM growth 5Y-5.47%
F-Score8
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 5.4 | ||
| Debt/EBITDA | 3.14 | ||
| Cap/Depr | 27.72% | ||
| Cap/Sales | 1.66% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.55% | ||
| Profit Quality | 141.37% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 2.08 |
F-Score8
WACC10.01%
ROIC/WACC0.55
Cap/Depr(3y)32.34%
Cap/Depr(5y)33.61%
Cap/Sales(3y)1.9%
Cap/Sales(5y)1.93%
Profit Quality(3y)152.3%
Profit Quality(5y)160.08%
High Growth Momentum
Growth
EPS 1Y (TTM)-0.88%
EPS 3Y0.41%
EPS 5Y0.14%
EPS Q2Q%-21.24%
EPS Next Y-19.25%
EPS Next 2Y-3.29%
EPS Next 3Y1.91%
EPS Next 5Y6.95%
Revenue 1Y (TTM)5.39%
Revenue growth 3Y6.18%
Revenue growth 5Y25.68%
Sales Q2Q%-1.52%
Revenue Next Year1.2%
Revenue Next 2Y3.28%
Revenue Next 3Y3.76%
Revenue Next 5Y4.23%
EBIT growth 1Y8.23%
EBIT growth 3Y1.77%
EBIT growth 5Y16.51%
EBIT Next Year26.62%
EBIT Next 3Y12.57%
EBIT Next 5Y4.68%
FCF growth 1Y3.09%
FCF growth 3Y-2.84%
FCF growth 5Y16%
OCF growth 1Y6.16%
OCF growth 3Y-1.61%
OCF growth 5Y16.65%