L3Harris (LHX) Stock Forecast & Price Target

L3Harris Technologies has demonstrated significant operational strength, with organic sales in the Aerojet segment increasing by approximately 12% and achieving adjusted operating margins of 13.3%. The company's increased revenue guidance for 2025, up by $100 million at the midpoint for its IMS and SAS sectors, reflects robust performance across its diversified business lines. Furthermore, the company's favorable free cash flow guidance has been raised by $200 million to $2.65 billion for FY25, representing a notable 9% increase above consensus expectations.

L3Harris Technologies reported a decline in operating margins within its SAS segment, falling 30 basis points year-over-year to 12.3%, impacted by product mix changes and end-of-life asset sales, which overshadowed some positive movements from LHX NeXt. The second quarter of 2025 reflected a significant headwind from net Estimated Additional Costs (EACs), which amounted to a $15 million burden, contrasting with no such impact in the previous year, indicating growing operational pressures. Additionally, the company's 2025 outlook presents challenges, including budget timing risks and a noted decline in performance within the Integrated Mission Systems segment, further complicating the financial landscape for L3Harris.