• If you are wondering whether L3Harris Technologies is trading at an attractive price, the next sections break down what the current share price might imply about the stock's underlying value.
• The stock closed at US$331.66, with returns of 56.0% over 1 year and 8.9% year to date, while the last 7 days and 30 days show returns of a 6.8% decline and a 4.0% decline respectively, which may have caught the attention of investors tracking shorter term moves.
• Recent news coverage around the defense and aerospace sector has kept attention on contractors like L3Harris Technologies, particularly as investors weigh contract pipelines and government budget priorities. These headlines help frame how the market is reacting to perceived opportunities and risks for the company.
• L3Harris Technologies currently has a valuation score of 2 out of 6. The rest of this article will compare what different valuation methods suggest about the stock, and finish with a way to put those numbers in a broader context.

L3Harris Technologies scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: L3Harris Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company could be worth by projecting its future cash flows and then discounting those back to today using a required rate of return. It is essentially asking what all those future cash streams are worth in today’s dollars.

For L3Harris Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve months Free Cash Flow is about $2.66b. Analysts provide detailed forecasts for several years, and Simply Wall St then extrapolates further, resulting in a projected Free Cash Flow of $4.13b in 2030.

Aggregating and discounting the ten year projections, plus cash flows beyond that period, the model arrives at an estimated intrinsic value of about $447.92 per share. Compared with the recent share price of $331.66, the DCF output implies the stock is around 26.0% undervalued based on these assumptions and inputs.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests L3Harris Technologies is undervalued by 26.0%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.

Approach 2: L3Harris Technologies Price vs Earnings

The P/E ratio is a common way to value profitable companies because it links the price you pay directly to the earnings the company is generating today. Investors typically accept a higher P/E when they expect stronger earnings growth or see less risk, and a lower P/E when growth expectations are more modest or risks are higher.

L3Harris Technologies currently trades on a P/E of 38.57x. This sits above the Aerospace & Defense industry average of about 37.27x and the peer average of 35.02x, which suggests the market is currently paying a higher price per dollar of earnings than these benchmarks.

Simply Wall St’s Fair Ratio for L3Harris Technologies is 33.29x. This is a proprietary estimate of what a “normal” P/E might be for the company, based on factors like its earnings growth profile, profit margins, size, industry and risk characteristics. Because it is tailored to the company, the Fair Ratio gives a more specific reference point than a simple comparison with industry or peer averages.

Comparing the current P/E of 38.57x with the Fair Ratio of 33.29x, the valuation on this metric screens as higher than what the model suggests.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 19 top founder-led companies.

Upgrade Your Decision Making: Choose your L3Harris Technologies Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you attach a clear story about L3Harris Technologies to your own assumptions for future revenue, earnings and margins. You can tie that story to a forecast and a fair value, then compare that fair value with the current price to decide whether the stock looks interesting to you. Each Narrative updates as new news or earnings arrive, which helps explain why some investors might see L3Harris as worth closer to the highest analyst target of US$443.00, while others lean toward the lower US$326.00 view based on the same information but a different interpretation of the company’s risks and opportunities.

Do you think there's more to the story for L3Harris Technologies? Head over to our Community to see what others are saying!

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.