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L3Harris (LHX) Gains But Lags Market: What You Should Know

Zacks Equity Research

L3Harris (LHX) closed the most recent trading day at $213.16, moving +0.18% from the previous trading session. This move lagged the S&P 500's daily gain of 0.19%. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq added 0.08%.

Heading into today, shares of the technology and communications company had gained 6.88% over the past month, outpacing the Aerospace sector's gain of 1.72% and the S&P 500's gain of 3.72% in that time.

Investors will be hoping for strength from LHX as it approaches its next earnings release, which is expected to be February 4, 2020. On that day, LHX is projected to report earnings of $2.75 per share, which would represent year-over-year growth of 40.31%. Our most recent consensus estimate is calling for quarterly revenue of $4.81 billion, up 188.67% from the year-ago period.

Any recent changes to analyst estimates for LHX should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.44% higher. LHX currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, LHX is holding a Forward P/E ratio of 18.67. For comparison, its industry has an average Forward P/E of 18.23, which means LHX is trading at a premium to the group.

Also, we should mention that LHX has a PEG ratio of 2.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LHX's industry had an average PEG ratio of 2.33 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 116, which puts it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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