Correction: Cowen Sees a Short Term Trading Opportunity in L3Harris Technologies (LHX) Ahead of Earnings
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(Updated - September 16, 2021 8:54 AM EDT)
Cowen analyst Gautam Khanna reiterated an Outperform rating and $250.00 price target on L3Harris Technologies (NYSE: LHX) but noted that shares may consolidate recent gains vs. defense large cap peers into Q3 earnings, due to the company's premium valuation & concerns that Q3 Street estimates appear too high.
The analyst stated "The estimate revision dynamic is a function of a Q4-weighted year vs. a longer-term issue, but
we thought it prudent to highlight the stock's near-term set-up". "We see increasing risk that LHX "misses" standing Q3
Street ests, but reiterates C21 guidance. This is not a major concern, but noteworthy since LHX's stock trades at a premium to defense large cap peers, which raises the bar into earnings. E.g. LHX's stock has re-rated higher vs. NOC/LMT on a YTD basis (& vs. GD/LMT/NOC on a 6-month basis), likely bolstered by LHX's $3.4B C21 stock buyback, a lower valuation "starting point", & a self-help roadmap that augurs extended margin gains (20-25bp/yr)."
Shares of L-3 Communications closed at $245.17 yesterday.
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