L3Harris Technologies Sees Analyst Upgrade Amid Defense Spending Momentum

L3Harris Technologies Inc. (LHX) has been upgraded by a major investment firm, which raised its target price to $425 per share from $390, citing improved execution within the company’s tactical communications and electronic warfare divisions. The analyst cited a 12% year-over-year increase in backlog, now totaling $41.3 billion, as a key driver of confidence in sustained revenue growth through 2026. The revision follows L3Harris’ recent quarterly earnings report, which showed adjusted EPS of $2.78, beating consensus estimates by $0.15. Revenue for the fourth quarter reached $3.14 billion, up 6% from the prior-year period, driven by higher demand for integrated mission systems and cybersecurity solutions. The company also announced a $3.2 billion contract win from the U.S. Air Force for advanced radar systems, reinforcing its position in high-growth defense programs. Market reaction has been positive, with LHX shares rising 3.2% in pre-market trading. The stock’s valuation now trades at 22.8x forward earnings, slightly above the sector average of 21.4x, reflecting investor optimism about long-term margins and contract diversification. Analysts note that L3Harris’ exposure to classified programs and international defense partnerships provides a buffer against short-term policy fluctuations. Investors are particularly focused on the company’s capital allocation strategy, including a planned $1.5 billion share buyback program and continued dividend growth. The firm’s free cash flow conversion remains strong at 94% of net income, supporting both strategic investments and shareholder returns.