DCF Studio

    LHX · NYQ · Industrials

    L3Harris Technologies, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 237.99

    Market price

    USD 278.96

    Implied upside

    -14.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 237.99-14.7%
    Exit multiple
    USD 349.41+25.3%
    Market price
    USD 278.96

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 23.6bnUSD 25.3bnUSD 26.8bnUSD 28.4bnUSD 29.9bnUSD 31.3bnUSD 32.6bnUSD 33.7bnUSD 34.8bnUSD 35.6bn+4.7%
    EBITUSD 2.4bnUSD 2.5bnUSD 2.7bnUSD 2.8bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.4bnUSD 3.5bnUSD 3.5bn+4.7%
    NOPATUSD 2.1bnUSD 2.2bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bn+4.7%
    Add depreciation & amortisationUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bn+4.7%
    Less capital expenditureUSD -451.5mUSD -604.4mUSD -772.2mUSD -953.9mUSD -1.1bnUSD -1.4bnUSD -1.6bnUSD -1.8bnUSD -2.0bnUSD -2.2bn+19.4%
    Capex, % of revenue1.9%2.4%2.9%3.4%3.8%4.3%4.8%5.3%5.8%6.3%-
    Less increase in working capitalUSD -43.6mUSD -39.9mUSD -39.2mUSD -38.1mUSD -36.5mUSD -34.4mUSD -31.8mUSD -28.8mUSD -25.3mUSD -21.4m-7.6%
    Free cashflow to firmUSD 3.0bnUSD 3.1bnUSD 3.1bnUSD 3.2bnUSD 3.2bnUSD 3.2bnUSD 3.2bnUSD 3.1bnUSD 3.1bnUSD 3.0bn+0.0%
    Discount factor0.96610.90160.84140.78530.73290.68390.63830.59570.55600.5188-
    Present valueUSD 2.9bnUSD 2.8bnUSD 2.6bnUSD 2.5bnUSD 2.3bnUSD 2.2bnUSD 2.0bnUSD 1.9bnUSD 1.7bnUSD 1.5bn-
    Present Value Of The ForecastUSD 22.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.635Reported 0.455, pulled toward 1.0 (Blume)
    Cost of equity7.58%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 3.6x interest cover. Book interest / average debt was lower, at 5.1%.
    Market capitalisationUSD 51.9bn82.4% of capital
    Total debtUSD 11.1bn17.6% of capital, book value as a proxy
    Tax rate11.0%Effective, capped at statutory
    WACC7.15%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 237.99

    59% of EV

    Forecast FCFF, final year
    USD 3.0bn
    Capex at depreciation, working capital in reinvestment
    USD 4.4bn
    Less reinvestment at g/ROIC (35.0% of NOPAT)
    USD -1.5bn
    Capitalised
    USD 2.8bn
    ROIC (WACC floor)
    7.2%
    Terminal value, undiscounted
    USD 62.6bn
    Terminal value, discounted
    USD 32.5bn
    Enterprise value
    USD 54.9bn
    Less net debt
    USD 10.0bn
    Equity value
    USD 44.8bn

    Exit at 18.4x EBITDA

    Value per shareUSD 349.41

    70% of EV

    Terminal value, undiscounted
    USD 103.1bn
    Terminal value, discounted
    USD 53.5bn
    Enterprise value
    USD 75.9bn
    Less net debt
    USD 10.0bn
    Equity value
    USD 65.8bn

    Spread between methods: 38%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.15%382.35385.93392.79405.22428.29
    6.15%295.12290.46285.80281.13276.47
    7.15%245.56241.77237.98234.20230.41
    8.15%208.23205.09201.95198.80195.66
    9.15%179.11176.47173.82171.17168.52

    Outlined: this model. Green text: above today's price of 278.96. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.6%5.0%6.6%
    EBIT margin11.3%10.0%11.9%
    Discount rate-7.2%6.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.