L3Harris (LHX) Accepts $1 Billion Government Investment to Accelerate Missile Solutions Business
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Government Investment Plan: L3Harris Technologies (LHX) accepts a $1 billion investment in convertible preferred securities from the Department of Defense, with plans for an IPO of its missile unit in the second half of 2026, indicating a strategic shift towards accelerating defense production.
- Capital Expenditure Pressure: Analysts note that defense contractors face increasing pressure for higher capital expenditures and R&D commitments, with L3Harris historically allocating a larger share of revenue to internal R&D, enhancing its competitive position under current policy conditions.
- Missile Asset Value: L3Harris's missile assets are seen as undervalued, and analysts suggest that growing demand for missiles has intensified discussions among investors about breaking up large defense contractors to unlock potential value.
- Valuation Outlook: The Missile Solutions Business could reach an enterprise value of approximately $10 billion as a standalone public company, with analysts believing it could command a valuation multiple near 20x, reflecting market favor for missile-focused companies.
Analyst Views on LHX
Wall Street analysts forecast LHX stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for LHX is 253.50 USD with a low forecast of 212.00 USD and a high forecast of 280.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
11 Buy
3 Hold
0 Sell
Strong Buy
Current: 340.680
Low
212.00
Averages
253.50
High
280.00
Current: 340.680
Low
212.00
Averages
253.50
High
280.00
About LHX
L3Harris Technologies, Inc. provides end-to-end technology solutions connecting the space, air, land, sea and cyber domains in the interest of national security. Its segments include Space & Airborne Systems (SAS), Integrated Mission Systems (IMS), Communication Systems (CS), and Aerojet Rocketdyne (AR). The SAS segment supplies full mission solutions as a prime and subsystem integrator in the space, airborne and cyber domains. The IMS segment delivers differentiated mission capabilities and prime systems integration to support intelligence, reconnaissance and surveillance (ISR), passive sensing and targeting, electronic attack, autonomy, power and communications, networks and sensors. CS enables warfighters across all domains with solutions critical to mission success even in the contested environments. The AR segment provides propulsion, power and armament products and systems to the U.S. Government, including the DoD, NASA and various aerospace and defense prime contractors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
