L3HARRIS TECHNOLOGIES INC (LHX)
US5024311095 - Common Stock
We assign a fundamental rating of 5 out of 10 to LHX. LHX was compared to 64 industry peers in the Aerospace & Defense industry. While LHX is still in line with the averages on profitability rating, there are concerns on its financial health. LHX is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
LHX had positive earnings in the past year.
LHX had a positive operating cash flow in the past year.
Each year in the past 5 years LHX has been profitable.
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 2.94%, LHX is in line with its industry, outperforming 57.81% of the companies in the same industry.
The Return On Equity of LHX (6.54%) is better than 64.06% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.50%, LHX is in line with its industry, outperforming 57.81% 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 8.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.94% | ||
| ROE | 6.54% | ||
| ROIC | 5.5% |
ROA(3y)3.81%
ROA(5y)4.76%
ROE(3y)7.29%
ROE(5y)11.09%
ROIC(3y)6.33%
ROIC(5y)7.4%
1.3 Margins
LHX has a better Profit Margin (6.32%) than 68.75% of its industry peers.
LHX's Profit Margin has declined in the last couple of years.
LHX's Operating Margin of 11.02% is fine compared to the rest of the industry. LHX outperforms 76.56% of its industry peers.
In the last couple of years the Operating Margin of LHX has declined.
LHX has a Gross Margin of 26.33%. This is in the better half of the industry: LHX outperforms 60.94% of its industry peers.
LHX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.02% | ||
| PM (TTM) | 6.32% | ||
| GM | 26.33% |
OM growth 3Y0.13%
OM growth 5Y-5.87%
PM growth 3Y0.9%
PM growth 5Y-10.98%
GM growth 3Y-3.36%
GM growth 5Y-5.03%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), LHX is destroying value.
Compared to 1 year ago, LHX has less shares outstanding
The number of shares outstanding for LHX has been increased compared to 5 years ago.
The debt/assets ratio for LHX is higher compared to a year ago.
2.2 Solvency
LHX has an Altman-Z score of 1.81. 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 1.81, LHX perfoms like the industry average, outperforming 43.75% of the companies in the same industry.
LHX has a debt to FCF ratio of 7.97. This is a slightly negative value and a sign of low solvency as LHX would need 7.97 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.97, LHX is in the better half of the industry, outperforming 60.94% of the companies in the same industry.
A Debt/Equity ratio of 0.68 indicates that LHX is somewhat dependend on debt financing.
LHX's Debt to Equity ratio of 0.68 is on the low side compared to the rest of the industry. LHX is outperformed by 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 7.97 | ||
| Altman-Z | 1.81 |
ROIC/WACC0.61
WACC9.05%
2.3 Liquidity
LHX has a Current Ratio of 1.01. This is a normal value and indicates that LHX is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.01, LHX is not doing good in the industry: 79.69% of the companies in the same industry are doing better.
LHX has a Quick Ratio of 1.01. This is a bad value and indicates that LHX is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.82, LHX is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
The earnings per share for LHX have decreased by -3.96% in the last year.
The Earnings Per Share has been growing slightly by 2.25% on average over the past years.
Looking at the last year, LHX shows a quite strong growth in Revenue. The Revenue has grown by 13.81% in the last year.
Measured over the past years, LHX shows a very strong growth in Revenue. The Revenue has been growing by 25.78% on average per year.
EPS 1Y (TTM)-3.96%
EPS 3Y2.14%
EPS 5Y2.25%
EPS growth Q2Q2.45%
Revenue 1Y (TTM)13.81%
Revenue growth 3Y2.2%
Revenue growth 5Y25.78%
Revenue growth Q2Q16.64%
3.2 Future
The Earnings Per Share is expected to grow by 10.88% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.80% on average over the next years.
EPS Next Y3.86%
EPS Next 2Y7.28%
EPS Next 3Y8.75%
EPS Next 5Y10.88%
Revenue Next Year9.08%
Revenue Next 2Y6.65%
Revenue Next 3Y6.07%
Revenue Next 5Y6.8%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
LHX is valuated rather expensively with a Price/Earnings ratio of 17.34.
Compared to the rest of the industry, the Price/Earnings ratio of LHX indicates a rather cheap valuation: LHX is cheaper than 89.06% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of LHX to the average of the S&P500 Index (24.92), we can say LHX is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 16.70, the valuation of LHX can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LHX indicates a rather cheap valuation: LHX is cheaper than 92.19% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of LHX to the average of the S&P500 Index (21.49), we can say LHX is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.34 | ||
| Fwd PE | 16.7 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LHX indicates a somewhat cheap valuation: LHX is cheaper than 75.00% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, LHX is valued cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.76 | ||
| EV/EBITDA | 15.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates LHX does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)4.5
PEG (5Y)7.71
EPS Next 2Y7.28%
EPS Next 3Y8.75%
5. Dividend
5.1 Amount
LHX has a Yearly Dividend Yield of 2.24%. Purely for dividend investing, there may be better candidates out there.
LHX's Dividend Yield is rather good when compared to the industry average which is at 1.34. LHX pays more dividend than 93.75% of the companies in the same industry.
LHX's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
5.2 History
The dividend of LHX is nicely growing with an annual growth rate of 16.34%!
LHX has been paying a dividend for at least 10 years, so it has 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 Years18
Div Non Decr Years18
5.3 Sustainability
LHX pays out 70.74% of its income as dividend. This is not a sustainable payout ratio.
LHX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP70.74%
EPS Next 2Y7.28%
EPS Next 3Y8.75%
L3HARRIS TECHNOLOGIES INC
NYSE:LHX (4/26/2024, 7:04:00 PM)
After market: 216.49 +1.95 (+0.91%)214.54
+7.18 (+3.46%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap40.78B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.34 | ||
| Fwd PE | 16.7 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)4.5
PEG (5Y)7.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.94% | ||
| ROE | 6.54% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.02% | ||
| PM (TTM) | 6.32% | ||
| GM | 26.33% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-3.96%
EPS 3Y2.14%
EPS 5Y
EPS growth Q2Q
EPS Next Y3.86%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)13.81%
Revenue growth 3Y2.2%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y