What we think about L3Harris Technologies (LHX)
L3 Harris in Three Words: Trusted Defense Disruptor
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Background
L3Harris provides advanced defense and commercial technologies in the space, air, land, sea, and cyber domains. The company serves customers in more than 100 countries, with its largest customers being the U.S. Government and its prime contractors. The company’s commitment to innovation and expansion in international markets, especially within NATO allies, augments its growth potential.
Despite a backdrop of economic fluctuations and market volatility, L3Harris has maintained a strong market presence, delivering 2023 full-year revenue of $19.4 billion (+14% YoY). underpinned by a robust international pipeline and a substantial $32 billion order backlog. These factors, combined with the company’s strategic acquisitions, such as that of Aerojet Rocketdyne, completed in July 2023, enhance its position in the defense industry by broadening its technological capabilities and market reach.
Geopolitical tensions remain elevated — the war in Ukraine has persisted for over two years, the conflict between Israel and Palestine continues to escalate, and policymakers are increasingly concerned about the risk of a Chinese invasion of Taiwan, a critical hub that produces almost two-thirds of the world’s semiconductors.
As a result, developed nations are compelled to increase their defense spending, driven by the need to enhance national security and maintain technological superiority in a rapidly changing global landscape. Companies positioned at the forefront of defense technology and innovation, such as L3Harris, stand to benefit significantly from these challenging geopolitical dynamics.
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