L3Harris Technologies, Inc. (LHX) Stock Valuation — DCF Analysis
Aerospace & Defense · NYSE
Current Price
$304.77
Intrinsic Value
$426.36
+28.5% margin of safety
COMPETITIVE MOAT
↑Integrated Defense Solutions
L3Harris offers a broad portfolio of mission-critical technologies, from sensors to communication systems. This integration creates a sticky ecosystem for defense customers.
↑Propulsion Expertise
Expansion of solid rocket motor facilities highlights specialized manufacturing capabilities. This niche expertise is difficult for competitors to replicate quickly.
↑Long-Term Government Contracts
The company benefits from multi-year defense contracts, providing revenue visibility and stability. These relationships are built on trust and proven performance.
INVESTMENT RISKS
↓Competition from New Entrants
Emerging players like SpaceX are disrupting the defense space, potentially impacting market share. Their agility and innovation pose a threat to legacy contractors.
↓Spin-off Uncertainty
The potential IPO of the Missile Solutions business introduces execution risk. Divesting assets can create operational complexities and impact future growth.
↓Dependence on Government Spending
L3Harris's revenue is heavily tied to defense budgets, which can fluctuate. Political shifts or budget cuts could negatively affect demand for its products.
Base case
LHX base case valuation
A base case discounted cash flow model for LHX estimates an intrinsic value of about $426.36 per share, against a current price of $304.77. The model assumes 13.1% annual free cash flow growth, a 10.0% discount rate, and a 22x exit multiple.
Intrinsic Value
$426.36
Margin of safety
+28.5%
Expected annual return
+6.9%
Base case assumptions: 13.1% annual growth, 10.0% discount rate, 22x exit multiple, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LHX valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for L3Harris Technologies, Inc. respond.
Open DCF Calculator for LHXCompany Overview
L3Harris Technologies, Inc. is a prominent technology firm specializing in aerospace and defense, delivering vital, high-stakes solutions to governmental and commercial clients across the globe. Its diverse operations are organized into several key segments: The Integrated Mission Systems division is responsible for providing versatile intelligence, surveillance, and reconnaissance (ISR) platforms, alongside various communication technologies. This unit also offers comprehensive support for fleet management, as well as the development, modification, and routine maintenance of sensors for ISR and airborne operations. Furthermore, it develops and integrates specialized mission systems tailored for naval vessels and maritime operations, including sophisticated signals and multi-intelligence platforms, autonomous surface and undersea vehicles, and advanced power and ship control electronics. Cutting-edge electro-optical and infrared technologies are also part of its offerings. The Space and Airborne Systems segment is dedicated to providing sophisticated space payloads, advanced sensor technologies, and complete mission solutions for space-based operations. It also offers secure intelligence and robust cyber defense capabilities, specialized avionics for mission-specific applications, and state-of-the-art electronic warfare systems. The Communication Systems division delivers reliable tactical communication tools and secure, broadband mobile networked communication devices. This encompasses airborne, space, and surface data link terminals, ground stations, and portable tactical satellite communication (SATCOM) systems designed for manned aircraft, unmanned aerial vehicles (UAVs), and naval vessels. The segment also produces integrated night vision systems, mountable on helmets and weapons, along with radio systems, applications, and equipment essential for critical public safety and professional communication needs. Additionally, it supplies SATCOM terminals and integrated battlefield management networks. Finally, the Aviation Systems segment focuses on defense-oriented aviation products, training for commercial pilots, and mission-critical network solutions for effective air traffic management. Originally established in 1895 as Harris Corporation, the company adopted its current name, L3Harris Technologies, Inc., in June 2019. Its headquarters are located in Melbourne, Florida.
Financial Metrics — LHX Stock Valuation Data
Revenue/Share (TTM)
$120.29
FCF/Share (TTM)
$13.86
ROIC (TTM)
5.4%
ROE (TTM)
8.9%
P/FCF
21.9x
EV/EBITDA
17.5x
FCF Yield
4.56%
Debt/Equity
0.58x
Based on trailing twelve-month data, LHX shows a free cash flow per share of $13.86 and a ROIC of 5.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 21.9x and FCF yield of 4.56% are important context metrics when evaluating LHX's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of LHX?
L3Harris Technologies, Inc. currently generates $13.86 in free cash flow per share. At the current price of $304.77, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is LHX undervalued?
LHX trades at a P/FCF ratio of 21.9x with a free cash flow yield of 4.56%. This P/FCF is in a moderate range. However, whether LHX is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value LHX stock using DCF?
To perform a DCF valuation on L3Harris Technologies, Inc.: (1) Start with the trailing free cash flow per share ($13.86) as the base, (2) project future FCF growth over 5-10 years based on Aerospace & Defense industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting LHX's risk profile — with a debt-to-equity of 0.58x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to LHX?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For L3Harris Technologies, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Aerospace & Defense trends, then discounting those amounts to today's dollars. LHX's ROIC of 5.4% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect LHX stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For LHX, with a debt-to-equity ratio of 0.58x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 17.5x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See LHX PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value LHX with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.