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L3Harris Technologies, Inc. (LHX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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L3Harris Technologies, Inc. (LHX)

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Intrinsic Value (DCF)

Current$340.42
→
Intrinsic$292.53
-14%
$174.36$292.53$527.47
Market implies 23% growth for 5 years
LHX appears fairly valued — current price aligns with our DCF estimate.
At $340, the market prices in continued strong cash flow growth (23%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $174 → Bull $527. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →16%18%20%22%
8%$384$422$462$505
10%$241$266$293$321
12%$165$184$203$224
14%$119$133$148$164

Bull Case

  • Bull case ($527) offers 55% upside at 24% growth, 8% discount

Bear Case

  • Bear case ($174) implies 49% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$2.58B
Year 2$3.10B
Year 3$3.72B
Year 4$4.46B
Year 5$5.35B
Terminal$84.81B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.15BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is LHX stock undervalued or overvalued?
🟡 FAIRLY VALUED

LHX trades at $340.42, within 10% of our $292.53 intrinsic value estimate. At 9.5% WACC and 20.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $165.34 (bear) to $485.76 (bull).

What is LHX's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.15B, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $12.37B net debt and dividing by 0.19B shares: Bear $165.34 | Base $292.53 | Bull $485.76. Current price $340.42 implies -7% to base case.

How is LHX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($68.15B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 31.7x.