L3Harris Technologies experienced a significant price movement last week with a 11% increase, correlating with a substantial contract with the Dutch Ministry of Defence and the launch of its advanced rocket motor, eSR-19. The agreement, valued up to EUR 1 billion, focuses on delivering state-of-the-art communication technology, while the missile innovation demonstrates L3Harris's ongoing commitment to defense sector advancements. This upward trend aligns with a broader market rally, as major indexes and sectors gained ground due to easing tariff exemptions, adding weight to L3Harris's stock performance alongside other market movements.

We've identified 2 possible red flags for L3Harris Technologies that you should be aware of.

These 13 companies survived and thrived after COVID and have the right ingredients to survive Trump's tariffs. Discover why before your portfolio feels the trade war pinch.

The recent developments with L3Harris Technologies, including the significant contract with the Dutch Ministry of Defence and the launch of its eSR-19 rocket motor, add momentum to the company's growth narrative. These actions align with its strategic goals to enhance market differentiation through partnerships and innovation in defense technology. Looking ahead, these factors may potentially boost revenue and earnings forecasts by attracting more government and commercial contracts globally.

Over the past five years, L3Harris's total return, factoring in share price growth and dividends, reached 26.14%. Comparatively, its performance has trailed the US Aerospace & Defense industry over the last year but exceeded the broader US market's return of 4.8% in the same period, indicating a mixed performance outlook. As L3Harris executes cost-saving initiatives and navigates post-merger integrations, these could either bolster margins or introduce challenges. The contract wins and partnerships may foster revenue growth but could also heighten operational risks if fixed-price contracts face budget overruns.

The current share price of US$200.75, when considered against the analyst consensus price target of US$255.26, suggests a potential upside. However, this valuation assumes that L3Harris will achieve projected revenue and earnings growth, including a revenue increase to US$23.9 billion by 2028. This context shows the price movement is aligned with improving market sentiment but remains contingent on future performance and broader economic factors.

Evaluate L3Harris Technologies' historical performance by accessing our past performance report.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:LHX.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com