L3Harris Technologies (LHX) drew fresh attention after securing US$84 million in new U.S. Army orders for its Next Generation Command and Control manpack Falcon systems, extending an earlier US$24 million NGC2 award.

Despite the new NGC2 orders, L3Harris Technologies’ share price has been under short term pressure, with the stock down 5.9% over 30 days and 18.0% over 90 days. At the same time, its 1 year total shareholder return of 13.3% and 3 year total shareholder return of 55.0% point to stronger longer term momentum.

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For L3Harris Technologies, fresh contract wins sit alongside a falling share price, which raises a simple question for the valuation work that follows: is the recent drop more about sentiment than the business itself?

Most Popular Narrative: 24.1% Undervalued

L3Harris Technologies last closed at $289.87, while the most followed narrative points to a fair value of $381.95, suggesting a sizable valuation gap driven by long term assumptions.

The analysts have a consensus price target of $381.95 for L3Harris Technologies based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $443.0, and the most bearish reporting a price target of just $300.0.

Curious what needs to happen for L3Harris Technologies to justify that higher value? Revenue, margins and future earnings multiples all play key roles in this story.

Result: Fair Value of $381.95 (UNDERVALUED)

However, L3Harris Technologies still faces contract execution and budget risks, with fixed price projects and potential U.S. and European defense spending constraints both able to pressure those assumptions.

Next Steps

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.