L3Harris (LHX) Stock Forecast & Price Target

L3Harris Technologies has demonstrated robust performance in its Aerojet segment, reporting a 12% increase in organic sales and impressive adjusted operating margins of 13.3%. The company's increased revenue guidance for 2025, particularly in its Integrated Mission Systems (IMS) and Space and Airborne Systems (SAS) sectors with a midpoint increase of $100 million, underlines its strong market positioning. Furthermore, the company's free cash flow guidance for FY25 has been raised by $200 million to $2.65 billion, reflecting a positive outlook that is 9% above consensus estimates, driven by growth in the missile solutions business and international demand.

L3Harris Technologies has experienced a decline in operational margins, with SAS operating margins dropping 30 basis points year-over-year to 12.3%, primarily due to a mix shift and the impact of end-of-life asset sales. Additionally, net Estimates at Completion (EAC) adjustments presented a significant $15 million headwind in the second quarter of 2025, marking a notable deterioration from the previous year's performance where no such impact was observed. Furthermore, the company faces budget timing risks and reported softness in its Space segment, compounded by decreased utilization in the Canadian Maritime Helicopter program, which collectively raises concerns about its future financial stability.