L3Harris (LHX) Stock Forecast & Price Target

L3Harris Technologies is positioned to benefit from a diversified defense-technology portfolio spanning radios, missiles, space systems, avionics, sensors, and propulsion, which gives it exposure to both short-cycle and long-cycle demand across modernization and munitions replenishment. Its 3Q26 results reinforced that thesis, with diluted EPS of $3.28, revenue of $6.1B, 9% organic growth, 15.9% segment operating margins, and $1.3B of FCF, while backlog rose to a record $53.2B and book-to-bill reached 3.2x. The company also appears well supported by long-term framework awards and capacity investments, though management’s slightly softer 2028 margin and FCF outlook suggests execution discipline will be key as the new CEO focuses on operations and scaling production.

L3Harris Technologies is facing a fundamentally pressured setup because about 75% of 2025 revenue comes from the U.S. government, leaving results highly exposed to appropriations delays, shutdowns, or debt-ceiling disruptions that can slow backlog conversion and cash generation. Heavy capex and R&D, including about $424M of PP&E investment in 2025 and an expected ~$600M in 2026E capex, are being used to fund a missile capacity build-out that could lift capex toward ~3.5% of sales while weighing on near-term free cash flow of roughly $2.8B. At the same time, execution risk is elevated by the planned 2H 2026 Missile Solutions IPO, an $85M goodwill impairment in FY2025, fixed-price contract margin risk, and a $700M lease obligation beginning January 2028.