Intrinsic Value L3Harris Technologies, Inc. (HRS.DE)

• Previous Close: €288.10
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

L3Harris Technologies, Inc. is a leading aerospace and defense technology innovator, operating across air, land, sea, space, and cyber domains. The company serves both government and commercial customers through four key segments: Communication Systems, Space and Intelligence Systems, Electronic Systems, and Critical Networks. Its diversified portfolio includes tactical communications, Earth observation, electronic warfare, and managed services for air traffic management and IT solutions. With a strong presence in defense and public safety markets, L3Harris leverages advanced sensors, analytics, and wireless technologies to maintain a competitive edge. The company’s global footprint and expertise in mission-critical systems position it as a trusted partner for defense modernization and commercial infrastructure resilience. Its focus on high-growth areas like space intelligence and cybersecurity aligns with increasing global demand for secure, next-generation defense solutions.

Revenue Profitability And Efficiency

In FY 2023, L3Harris reported revenue of EUR 19.42 billion, with net income of EUR 1.23 billion, reflecting a net margin of approximately 6.3%. The company generated EUR 2.1 billion in operating cash flow, demonstrating solid cash conversion efficiency. Capital expenditures stood at EUR 449 million, indicating disciplined reinvestment in technology and infrastructure to sustain long-term growth.

Earnings Power And Capital Efficiency

Diluted EPS for the year was EUR 6.44, supported by stable earnings power across its diversified segments. The company’s capital allocation strategy balances reinvestment in high-margin defense technologies with shareholder returns, as evidenced by its EUR 4.16 dividend per share. Operating cash flow coverage of capital expenditures remains robust, ensuring financial flexibility.

Balance Sheet And Financial Health

L3Harris maintains a balanced financial structure, with EUR 560 million in cash and equivalents against total debt of EUR 13.13 billion. The debt load reflects strategic acquisitions and investments in R&D, typical for the capital-intensive aerospace and defense sector. Liquidity appears adequate, supported by strong operating cash flows and a manageable leverage profile.

Growth Trends And Dividend Policy

The company’s growth is driven by defense modernization programs and expanding commercial infrastructure needs. Its dividend policy, yielding approximately 2.5% based on current market cap, underscores a commitment to returning capital to shareholders while funding organic and inorganic growth initiatives. Future revenue expansion will likely hinge on government contracts and technological advancements in space and cyber domains.

Valuation And Market Expectations

With a market capitalization of EUR 42.85 billion and a beta of 0.73, L3Harris is viewed as a relatively stable investment within the industrials sector. The valuation reflects expectations of steady growth in defense spending and the company’s ability to secure high-value contracts in a competitive global market.

Strategic Advantages And Outlook

L3Harris benefits from its diversified technology portfolio, strong government relationships, and expertise in next-generation defense systems. The outlook remains positive, supported by rising global defense budgets and increasing demand for cybersecurity and space-based intelligence solutions. Strategic acquisitions and R&D investments should further solidify its market position over the medium term.

Sources

Company filings, market data