Join iREIT on Alpha today to get the most in-depth research that includes REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, and other income alternatives. 438 testimonials and most are 5 stars. Nothing to lose with our FREE 2-week trial .In the first months of this year, I frequently discussed defense contractors. I brought them up so much that it started to annoy me a tiny bit.Analyst’s Disclosure:I/we have a beneficial long position in the shares of RTX, NOC, GE, LHX, CNQ, TPL, LB either through stock ownershi ...

BREAKING: China Launches U.S. Chip Probes Ahead Of Trade Talks L3Harris Technologies (LHX) is among the names making new highs in the stock market on Friday, rounding off a week that pushed major equity indexes to new peaks. Enbridge (ENB) is in a 5% buy zone above a 47.44 entry. Shares on Friday traded at levels last seen in May 2015. Enbridge provides pipelines and services for oil and gas… Related news Get Started Learn how you can make more money with IBD's investing tools, top-performing stock lists, a ...

Company Overview - L3Harris Technologies, Inc. (LHX) is valued at a market cap of $50.6 billion and specializes in aerospace and defense technology, providing mission-critical solutions [1] - The company is based in Melbourne, Florida, and offers advanced communication systems, space technologies, electronic warfare, avionics, and defense modernization services to government, military, and commercial customers [1] Market Position - LHX is classified as a "large-cap stock" due to its valuation of $10 billion or more, recognized for its innovation and ability to deliver integrated solutions across various domains [2] - The stock has seen a decline of 3.5% from its 52-week high of $280.52, reached on August 5, but has increased by 10.3% over the past three months, outperforming the S&P 500 Index's 8.4% return during the same period [3] Performance Metrics - Year-to-date (YTD), LHX shares are up 28.7%, significantly outperforming the S&P 500's 10.7% rise [4] - Over the past 52 weeks, LHX stock has gained 18.1%, slightly underperforming the S&P 500's 19% increase [4] - The stock has been trading above its 200-day moving average since mid-May and above its 50-day moving average since early March, with minor fluctuations [4] Recent Earnings - On July 24, LHX shares rose 1.3% following better-than-expected Q2 2025 earnings results, with revenue growing 2.4% year-over-year to $5.4 billion, surpassing consensus estimates by 2.5% [5] - The adjusted EPS for the quarter was $2.78, reflecting a 15.8% increase from the previous year and 12.1% above analyst expectations, driven by a record book-to-bill ratio of 1.5x and healthy organic growth [5] Competitive Landscape - LHX has significantly outperformed its rival, Lockheed Martin Corporation (LMT), which has declined 20.7% over the past 52 weeks and 5.9% YTD [6] - Analysts maintain a cautiously optimistic outlook for LHX, with a consensus rating of "Moderate Buy" from 20 analysts and a mean price target of $301.85, indicating an 11.5% premium to current levels [6]

Summary of the Conference Call Company and Industry Overview - The conference call involved L3Harris Technologies, a key player in the aerospace and defense industry, with a focus on defense budgets, missile defense, and advanced communication systems [1][2][3] Key Points and Arguments Defense Budget Insights - The U.S. defense budget for 2026 is projected at $878 billion, with a significant reconciliation bill of $155 billion expected to be spent over three to four years, indicating unprecedented funding levels for the Department of Defense (DOD) [4][5] - L3Harris derives approximately 23% of its revenues from international markets, highlighting growth opportunities in European defense budgets [6] Golden Dome Initiative - The Golden Dome initiative includes a budget of $25 billion for missile defense, with expectations for L3Harris to capture 10-20% of this budget, translating to potential revenue generation in the near term [11][13] - The company has a strong backlog in space-related projects, including hypersonic ballistic tracking satellites, positioning it well for future contracts [8][10] Aerojet Rocketdyne Acquisition - L3Harris acquired Aerojet Rocketdyne for $4.7 billion in 2023, with current valuations estimated between $11 billion to $15 billion, indicating significant growth potential [19][20] - The missile segment of Aerojet Rocketdyne is expected to see double-digit growth for the foreseeable future, driven by increased demand for missiles and munitions due to geopolitical tensions [24][23] Production Capacity and Competitive Advantage - L3Harris produces approximately 100,000 solid rocket motors annually, significantly outpacing competitors, which positions it favorably in the market [35][34] - The company is focused on modernizing its production facilities and increasing capacity to meet growing demand, with investments in robotics and artificial intelligence [31][30] Software-Defined Radios and Modernization - The DOD's modernization efforts are currently at 42% completion, with L3Harris well-positioned to benefit from ongoing upgrades and new contracts, particularly in resilient communications [44][46] - The international market for tactical communications is expanding, with over $1 billion booked in Europe alone, driven by the need for advanced technology in response to regional threats [46][47] Financial Performance and Future Guidance - L3Harris has set a revenue target of $23 billion for 2026, with expectations for margin improvements and free cash flow of $3 billion [75][76] - The company has successfully reduced costs by over $1.5 billion ahead of schedule, enhancing its competitive position and operational efficiency [79][80] Additional Important Insights - The company emphasizes the importance of supply chain management and the need for more suppliers in critical areas such as nozzles and igniters to support production capacity [41][42] - L3Harris is actively working on electronic warfare capabilities, including the Next Gen Jammer program, which is expected to generate significant revenue once in production [60][62] This summary encapsulates the key discussions and insights from the conference call, highlighting L3Harris Technologies' strategic positioning within the aerospace and defense industry, its growth opportunities, and financial outlook.

Core Insights - Global defense spending is increasing due to geopolitical tensions, benefiting companies like Kratos Defense & Security Solutions, Inc. (KTOS) and L3Harris Technologies, Inc. (LHX) [1] - Both companies are positioned to capitalize on investments in unmanned systems, satellite communications, cyber defense, and advanced weapon systems [1][2] Summary for Kratos Defense & Security Solutions, Inc. (KTOS) - Recent Achievements: Kratos reported a year-over-year revenue growth of 17.1% for Q2 2025 and raised its revenue guidance for 2025 from $1.26-$1.29 billion to $1.29-$1.31 billion [4][6] - Financial Stability: The company ended Q2 2025 with cash and cash equivalents of $784 million, up from $329 million at the end of 2024, and long-term debt of $233 million [7] - Challenges: Kratos faces supply-chain constraints, labor shortages, and rising inflationary costs, which may pressure margins and delay project execution [8] Summary for L3Harris Technologies, Inc. (LHX) - Recent Achievements: L3Harris reported a 15.8% year-over-year growth in earnings per share and a 2.4% rise in revenues for Q2 2025, along with an expansion of its satellite integration facility [9][10] - Financial Stability: The company ended Q2 2025 with cash and cash equivalents of $480 million and long-term debt of $10.98 billion, indicating a relatively weak financial position [14] - Challenges: L3Harris is experiencing labor shortages due to an aging workforce, which may lead to production delays and quality issues [15] Comparative Analysis - KTOS has shown a stock price increase of 195.4% over the past year, significantly outperforming LHX's 20.4% growth [11] - LHX has a more attractive valuation with a forward Price/Sales (P/S F12M) multiple of 2.28X compared to KTOS's 7.73X [21] - Earnings estimates for KTOS indicate a year-over-year growth of 4.1%, while LHX's estimates show a decline of 19.9% [16][17] Conclusion - Both companies are well-positioned to benefit from rising defense budgets, with Kratos showing stronger momentum and financial stability [22] - L3Harris offers a more stable investment option due to its diversified portfolio and favorable valuation [23]

Core Viewpoint - Howmet Aerospace Inc. (HWM) is currently positioned as a stronger investment compared to L3Harris Technologies, Inc. (LHX) due to its robust growth in both commercial and defense aerospace markets, while L3Harris faces challenges from high debt and labor shortages [2][24]. Howmet Aerospace Inc. (HWM) - The commercial aerospace market is a significant growth driver for Howmet, with revenues increasing by 8% year over year in Q2 2025, accounting for 52% of its business [4]. - Demand for Howmet's products is supported by the rise in air travel and the production recovery of Boeing 737 MAX aircraft [4]. - The defense segment also shows strong performance, with revenues surging 21% year over year in Q2 2025, making up 17% of the company's business [5]. - The U.S. Defense Appropriations Act for FY 2026 allocates $831.5 billion, which is expected to benefit Howmet's defense contracts [6]. - Howmet has a shareholder-friendly approach, paying $83 million in dividends and repurchasing $300 million in shares in the first half of 2025 [7]. - The company has a strong liquidity position, with cash equivalents and receivables of $545 million against short-term maturities of only $5 million [9]. - The Zacks Consensus Estimate for HWM's 2025 sales and EPS indicates year-over-year growth of 9.4% and 32.7%, respectively [15]. L3Harris Technologies, Inc. (LHX) - L3Harris benefits from solid U.S. budget funding, particularly with its HBTSS satellite, which is crucial for tracking hypersonic missiles [10][11]. - The company has secured significant international revenues, accounting for approximately 20.7% of total revenues in Q2 2025 [11]. - L3Harris has faced challenges due to a high debt level of $10.98 billion, which exceeds its cash and cash equivalents of $480 million [13]. - Labor shortages in the aerospace-defense industry pose a risk to L3Harris's ability to meet production timelines [14]. - The Zacks Consensus Estimate for LHX's 2025 sales indicates a modest growth of 2%, but EPS is projected to decline by 19.9% [15]. Price Performance and Valuation - Over the past year, Howmet shares have increased by 76.9%, while L3Harris stock has gained 20.4% [18]. - Howmet is trading at a forward P/E ratio of 42.42X, above its three-year median of 28.18X, while L3Harris's forward P/E is at 23.61X, above its median of 16.34X [19].

Industry Overview - Global military expenditure increased by nearly 10% from 2023 to 2024, reaching $2.7 trillion, marking the fastest growth since the Cold War [1] - Ongoing conflicts in Eastern Europe and the Middle East are expected to drive continued defense spending growth [1] Company Insights: L3Harris Technologies - L3Harris Technologies has a market cap exceeding $50 billion and is rapidly expanding its technological capabilities, including a partnership with Joby Aviation in the eVTOL sector [2] - The stock forecast for L3Harris is $279.47, indicating a 3.23% upside, with a current price of $270.72 and a high forecast of $323.00 [3] - The company successfully launched its Navigation Technology Satellite-3, the first defense-focused experimental satellite in nearly 50 years [3] - L3Harris reported strong earnings in Q2 2025, surpassing analyst expectations due to initiatives like the "Golden Dome" project [4] - The integration with Aerojet Rocketdyne has led to doubled production and deliveries, resulting in record quarterly revenue [5] - Analysts remain optimistic, with 13 out of 18 rating L3Harris a Buy, and earnings expected to rise by over 12% in the coming year [5] Company Insights: Kratos Defense & Security Solutions - Kratos Defense reported a 17% year-over-year revenue growth, exceeding analyst expectations in its mid-year earnings report [6] - The stock forecast for Kratos is $57.64, indicating a 15.85% downside, with a current price of $68.50 [8] - Kratos has a significant contract pipeline of approximately $13 billion, including a $750 million contract for the Poseidon program [9] - The success of the Valkyrie tactical drone has prompted Kratos to increase production, contributing to its strong performance [8] Company Insights: TransDigm Group - TransDigm Group, with a market cap around $80 billion, specializes in aircraft components for aerospace and defense [12] - The company missed earnings and revenue expectations in its fiscal third quarter due to challenges with Airbus and Boeing, but defense revenue improved by 13% year-over-year [13] - TransDigm generated $630 million in cash flow despite the earnings miss, indicating strong fundamentals in its defense segment [13]

Group 1: Cathie Wood's Investment Strategy - Cathie Wood is focusing on national security technology as an emerging investment theme alongside artificial intelligence (AI) [1][4] - Wood has a significant position in Palantir Technologies, which is a key player in AI and military operations [2][4] - Recent buying activity indicates Wood is expanding her portfolio to include L3Harris Technologies, suggesting a strategy to diversify within the national security sector [4][10] Group 2: AI in National Security - AI is becoming a transformative force in modern military strategy, with applications in satellite imagery analysis, cybersecurity, and autonomous systems [6][7] - Established defense contractors like Northrop Grumman and Lockheed Martin are recognized players, but Palantir's versatile AI platforms set it apart [7][8] Group 3: L3Harris Technologies - L3Harris manufactures mission-critical systems that are expected to benefit from AI integration, making it an attractive investment for Wood [10][12] - The company is collaborating with Palantir on the U.S. Army's Titan program, highlighting its role in significant defense contracts [12] - L3Harris trades at an EV/EBITDA multiple of 16.4, which is relatively high but may not fully reflect the potential upside from AI integration [15][16]

Industry Collaboration - Joby Aviation 与国防承包商 L3Harris 合作测试自动驾驶混合动力飞机 [1] Technological Advancement - 行业关注 Joby Aviation 在自动驾驶混合动力飞机领域的测试进展 [1]

Core Insights - Joby Aviation has delivered its first electric vertical take-off and landing (eVTOL) aircraft to the US Air Force, marking a significant milestone for the air taxi start-up [1] - A partnership has been established between Joby Aviation and L3Harris to develop a next-generation military aircraft that can operate both autonomously and with a pilot [1][2] - Testing for the new military craft is expected to begin in the fall, with operational demonstrations planned for 2026 [2] Industry Context - The ongoing conflicts, such as the one between Russia and Ukraine, are influencing perceptions of low altitude aviation and the urgency for rapid deployment capabilities [3] - The collaboration combines Joby's hybrid VTOL technology with L3Harris's military systems expertise, aiming to enhance the operational capabilities of military aviation [2]