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L3Harris Technologies (New York Stock Exchange:LHX) -4.9% In Friday trading, Deutsche Bank downgrades its rating from Buy to Hold but raises its price target from $245 to $257, driven by valuation, with shares up 16% year to date and limited upside potential from current levels.
“A significant positive “The review case has become more dependent on the second half and what appears to be more margin dependent given the lack of organic growth acceleration to date,” writes analyst Scott Deuschle, adding that the absence of book-to-bill disclosures for the segment also makes gaining confidence in an acceleration of organic growth in the second half “somewhat more problematic.”
L3Harris (LHX) rose 2.5% on Thursday after beating second-quarter adjusted earnings estimates and raising fiscal 2024 adjusted earnings guidance to $12.85-$13.15/share from its prior forecast of $12.70-$13.05; the analyst consensus was calling for $12.97/share.
At the same time, Deuschle upgrades Lockheed Martin (LMT) from Hold to Buy with a price target of $600, up from $540, believing that strong second-quarter results point to an “attractive opportunity to beat expectations/upside” in the second half of 2024 that is likely to extend into 2025-26.
If Deutsche Bank is correct in believing that the outlook revisions for Lockheed (LMT) are positive relative to its print and Wall Street numbers, the analyst believes the stock could rise to reflect that opportunity, with a 5% target free cash flow yield in 2026 driving his updated $600 price target.
