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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
L3Harris Technologies, Inc. (XNYS:LHX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LHX
Name:
L3HARRIS TECHNOLOGIES, INC. (XNYS:LHX)
Sector:
- 16000.00K
Industry:
Aerospace & Defense
CEO:
Mr. William Brown
Total Employees:
47,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -139.28% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF L3HARRIS TECHNOLOGIES, INC.(LHX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AEROSPACE & DEFENSE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
227.2
One Month Price Target:
$228.07
Six Month Price Target :
$232.44
Likely Price in One Year's Time:
Ticker:
$237.68
Likely Trading Range Today Under (Normal Volatility)
$226.52
Price Upper limit ($) :
$228.06
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$217.96
This week:
$206.55
This month :
$185.89
Other Primary facts
Market Cap:
43.97B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
191.35M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.98%
-14.3%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$270.06
$250.37
$184.34
$204.03
Medium risk (<10%) entry points
Buy Call
Sell Call
$243.97
Buy Put:
Sell Put:
$239.76
$210.38
$214.64
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LHX
Sharpe Ratio:
1.54%
Comparison:
LHX, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 42.37% higher than the industry
& is -32.24% lower than the market/S&P 500 average
Average Returns/Yield of
LHX
Daily returns:
0.04%
Weekly returns:
0.20%
Monthly returns:
0.79%
Yearly returns:
10.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is -8.70% below industry average
Classification:
LHX, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.55
Statistical test of Returns:
LHX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.00%
Weekly Volatility:
4.47%
Monthly Volatility:
8.94%
Yearly Volatility:
30.97%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.54%
Volatility in last five trading days has been -72.77% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.07%
Weekly VaR:
-9.09%
Monthly VaR:
-18.18%
How Much Can the price of
LHX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-62.98%
This translates to price declining to:
$191.70
This translates to price declining to:
$84.11
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
LHX is a 28.32% riskier investment compared to the market/S&P 500 & is 9.93% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -36.70% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LHX
Beta in relation to market/S&P 500--0.69
Expected beta in 1 year's time:
0.661
Expected beta in 3 year's time:
0.935
Unlevered (debt free) Beta:
0.521
Beta in relation to Nasdaq (XNAS):
0.484
Beta in relation to all global stocks::
0.656
Beta Comparison & Analysis
Beta of competitors/peers::
1.012
Beta is -32.21% lower than peers
Average Industry Beta:
1.007
Beta is -31.86% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.31%
Sustainable growth rate is -73.33% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.017
Alpha is 326.53% above industry average alpha yield
Alpha is 107% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LHX
Equity cost of capital:
0.078
Equity cost of capital is -21.87% below industry mean WACC
Unlevered (without debt) cost of capital:
5.96%
Before-tax cost of debt:
3.41%
After-tax cost of debt:
2.69%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.69%
WACC is -16.07% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$90.67
Revenue growth rate per share of (3Y):
2.24
Annual revenue growth rate is -33.60% below industry average
EPS:
$9.28
Expected Annual growth rate of EPS (3Y):
4.18%
Expected future EPS growth rate is -44.77% lower than the Aerospace & Defense industry
Free cash flow (FCF) per share:
$8.86
Balance sheet equity growth per share: 52.04%
Equity growth rate per share is -30054.09% lower than the industry
Debt per share
$39.57
EBITDA per share
$18.34
Valuation Analysis Today of
LHX
P/E Ratio:
23.42
P/E Ratio of Competitors/Peers:
31.61
P/E ratio is -25.92% lower than main peers & is -50.17% lower than the industry
Stock price/value with industry average P/E ratio: $436.09
LHX is -47.90% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $155.92
Present value of the expected future dividends only: $126.12
P/S (Price to Sales ratio):
2.51
Price to sales ratio is -73.65% below the industry mean
P/B (Price to book value ratio):
2.24
Price to free cash flow: 25.65
Price to free cash flow ratio is -68.00% lower than the industry
Net income growth rate (3Y):
17.65%
Net income growth rate is 482.98% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 11.76%
Dividend yeild: 1.88%
Previous Dividend: $1.12
Previous adjusted dividend: $1.12
Previous Dividend: $4.28
Expected next dividend best case: $1.22
Expected next dividend worst case: $1.02
Average dividend payment (long-term): $0.95
Average dividend increase/decrease (growth rate) % per period: 4.31%
Expected next dividend payment date: 15/09/2022
Expected next dividend record date: 09/01/2022
-
Previous dividend payment date: 17/06/2022
Previous dividend record date: 06/03/2022
-
Dividend History:
2022-06-02--$1.12
2021-11-18--$1.02
2021-05-28--$1.02
2022-03-10--$1.12
2021-09-02--$1.02
2021-03-11--$1.02
Dividend growth rate is -132.61% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
39.31%
Net debt to equity ratio:
38.60%
Debt to assets ratio:
21.98%
Net debt to assets ratio:
21.59%
Debt-to-asset ratio is -59.03% below industry average
Ability to repay debt:
Interest coverage ratio:
13.14
Interest coverage ratio is 58.03% more than industry average
Looking forward:
Debt growth rate:
2.31%
Annual debt growth is -97% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.07%
Analysis of Key Statistics
Correlation of price movement with the market:
0.589
Statistical significance of correlation:
LHX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 8.74% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.039
Covariance of price movement with the market:
0.045
Kurtosis
8.309
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.238
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LHX
Gross Profit Margin Ratio:
121%
Operating Profit Margin Ratio:
11.76%
Operating profit margin is -102.36% lower than the industry
Net Profit Margin Ratio:
121%
Effective Tax Rate:
19.24%
Effective tax rate is -18.92% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.62%
Return on equity (ROE) is 21.47% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.38%
Return on assets (ROA) is 25.97% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.32
Current ratio is -58.33% below industry average
Cash Conversion Cycle (days):
38.6
Cash conversion cycle is -93.30% below industry average
The remaining useful life of property plant & equipment is: 1.8 years
Stock based compensation to net income ratio:
4.48%
In-depth Efficiency Analysis
Revenue generated per employee:
369.1K
Each employee generates 7% more revenue than industry average revenue per employee
EBITDA generated per employee:
74.7K
Each employee generates 99% more EBITDA than industry average revenue per employee
Profit generated per employee:
39.4K
Each employee generates 513% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.3K
Each employee generates -85% less free cash flow than industry average revenue per employee
Assets/Capital per employee
599.9K
Each employee generates -85% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LHX
IHS Markit Ltd. (XNYS:INFO)
Trane Technologies plc (XNYS:TT)
Enbridge Inc. (XNYS:ENBA)
JOHNSON CONTROLS INTERNATIONAL PLC (XNYS:JCI)
THOMSON REUTERS CORPORATION (XNYS:TRI)
PARKER-HANNIFIN CORPORATION (XNYS:PH)
CARRIER GLOBAL CORPORATION (XNYS:CARR)
CUMMINS INC. (XNYS:CMI)
CANADIAN PACIFIC RAILWAY LIMITED (XNYS:CP)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
17.35B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
12.12B
5.23B
-
-
3.19B
-
-
3.19B
-
267.00M
948.00M
3.51B
2.04B
1.85B
2.29B
441.00M
1.85B
Statement of Cash Flow
Date:
Period:
232.00M
Differed Income Tax :
- 162000.00K
Stock Based Compensation :
83.00M
Change in Working Capital :
- 487000.00K
Accounts Receivables:
- 239000.00K
Other Working Capital:
33.00M
Other Non-Cash Items:
- 102000.00K
Net Cash Provided by Operating Activities:
39.00M
Investments in PP&E:
- 55000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/1/22
2022
Q1
402.00M
-
402.00M
4.45B
1.09B
307.00M
6.25B
2.85B
18.19B
6.49B
-
91.00M
571.00M
28.20B
-
34.44B
1.72B
265.00M
187.00M
1.28B
1.47B
4.74B
7.57B
1.58B
10.34B
-
15.08B
193.00M
3.13B
- 150000.0K
16.09B
April 1, 2022 at 6:00:00 AM
15.31B
19.26B
34.34B
-
7.84B
7.4B
-
- 9000.00K
- 64000.00K
- 5000.00K
-
- 308000.00K
- 218000.00K
18.00M
- 513000.00K
- 1000.00K
- 539000.00K
402.00M
941.00M
39.00M
- 55000.00K
- 16000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
LHX
2023
2024
2025
2026
2027
$281.54
$294.52
$308.10
$322.31
$337.17