L3HARRIS TECHNOLOGIES INC (LHX) Stock Fundamental Analysis
NYSE:LHX - New York Stock Exchange, Inc. - US5024311095 - Common Stock - Currency: USD
LHX gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year LHX was profitable.
In the past year LHX had a positive cash flow from operations.
Each year in the past 5 years LHX has been profitable.
LHX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LHX has a Return On Assets (3.89%) which is comparable to the rest of the industry.
With a decent Return On Equity value of 8.39%, LHX is doing good in the industry, outperforming 64.62% of the companies in the same industry.
With a Return On Invested Capital value of 5.51%, LHX perfoms like the industry average, outperforming 49.23% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LHX is below the industry average of 8.44%.
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
With a decent Profit Margin value of 7.55%, LHX is doing good in the industry, outperforming 69.23% of the companies in the same industry.
In the last couple of years the Profit Margin of LHX has declined.
LHX has a Operating Margin of 11.26%. This is in the better half of the industry: LHX outperforms 72.31% of its industry peers.
In the last couple of years the Operating Margin of LHX has declined.
LHX has a Gross Margin (26.01%) which is comparable to the rest of the 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.
LHX has about the same amout of shares outstanding than it did 1 year ago.
LHX has more shares outstanding than it did 5 years ago.
The debt/assets ratio for LHX has been reduced compared to a year ago.
2.2 Solvency
LHX has an Altman-Z score of 2.09. 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.
With a Altman-Z score value of 2.09, LHX is not doing good in the industry: 67.69% of the companies in the same industry are doing better.
The Debt to FCF ratio of LHX is 5.40, which is a neutral value as it means it would take LHX, 5.40 years of fcf income to pay off all of its debts.
LHX has a better Debt to FCF ratio (5.40) than 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.
The Debt to Equity ratio of LHX (0.60) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 5.4 | ||
| Altman-Z | 2.09 |
ROIC/WACC0.56
WACC9.8%
2.3 Liquidity
LHX has a Current Ratio of 1.02. This is a normal value and indicates that LHX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.02, LHX is doing worse than 87.69% of the companies in the same industry.
A Quick Ratio of 0.85 indicates that LHX may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.85, LHX is doing worse than 73.85% of the companies in the same industry.
| 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.
LHX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.14% yearly.
The Revenue has been growing slightly by 5.39% in the past year.
Measured over the past years, LHX shows a very strong growth in Revenue. The Revenue has been growing by 25.68% on average per year.
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
Based on estimates for the next years, LHX will show a small growth in Earnings Per Share. The EPS will grow by 6.95% on average per year.
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-19.21%
EPS Next 2Y-3.24%
EPS Next 3Y1.84%
EPS Next 5Y6.95%
Revenue Next Year1.23%
Revenue Next 2Y3.34%
Revenue Next 3Y3.8%
Revenue Next 5Y4.23%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.82, which indicates a rather expensive current valuation of LHX.
87.69% of the companies in the same industry are more expensive than LHX, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of LHX to the average of the S&P500 Index (26.98), we can say LHX is valued slightly cheaper.
A Price/Forward Earnings ratio of 20.12 indicates a rather expensive valuation of LHX.
Based on the Price/Forward Earnings ratio, LHX is valued a bit cheaper than the industry average as 78.46% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.49, LHX is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.82 | ||
| Fwd PE | 20.12 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LHX is valued a bit cheaper than the industry average as 75.38% of the companies are valued more expensively.
96.92% 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 | 20.35 | ||
| EV/EBITDA | 15.66 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)138.06
EPS Next 2Y-3.24%
EPS Next 3Y1.84%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.94%, LHX has a reasonable but not impressive dividend return.
LHX's Dividend Yield is rather good when compared to the industry average which is at 1.27. LHX pays more dividend than 92.31% of the companies in the same industry.
LHX's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
On average, the dividend of LHX grows each year by 16.34%, which is quite nice.
LHX has paid a dividend for at least 10 years, which is a reliable track record.
LHX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
The dividend of LHX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP55.45%
EPS Next 2Y-3.24%
EPS Next 3Y1.84%
246.98
+0.18 (+0.07%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners89.02%
Inst Owner Change0.85%
Ins Owners0.32%
Ins Owner Change4.04%
Market Cap46.17B
Analysts80
Price Target268.29 (8.63%)
Short Float %2.68%
Short Ratio2.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
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)2.14%
PT rev (3m)4.36%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.48%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-2.56%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-3.14%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-2.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.82 | ||
| Fwd PE | 20.12 | ||
| P/S | 2.17 | ||
| P/FCF | 20.35 | ||
| P/OCF | 17.62 | ||
| P/B | 2.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.66 |
EPS(TTM)12.46
EY5.04%
EPS(NY)12.27
Fwd EY4.97%
FCF(TTM)12.14
FCFY4.91%
OCF(TTM)14.02
OCFY5.68%
SpS113.65
BVpS102.33
TBVpS-46.29
PEG (NY)N/A
PEG (5Y)138.06
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 | 2.09 |
F-Score8
WACC9.8%
ROIC/WACC0.56
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-19.21%
EPS Next 2Y-3.24%
EPS Next 3Y1.84%
EPS Next 5Y6.95%
Revenue 1Y (TTM)5.39%
Revenue growth 3Y6.18%
Revenue growth 5Y25.68%
Sales Q2Q%-1.52%
Revenue Next Year1.23%
Revenue Next 2Y3.34%
Revenue Next 3Y3.8%
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%