By Peet Serfontein & Khumbulani Kunene
L3Harris Technologies, Inc. is an aerospace and defence technology innovator. LHX designs, develops, and manufactures radio communications products and systems for the defence industry. Formed through the merger of L3 Technologies and Harris Corporation in 2019, the company provides advanced defence and commercial technologies across air, land, sea, space, and cyber domains.
L3Harris services governments and commercial customers in more than 100 countries, including the US Department of Defence and allied governments. Its product offerings include making tactical communications and other integrated vision solutions; air traffic management; and intelligence, surveillance, and reconnaissance systems.
Technically, a price in a developing symmetrical triangle pattern presents a promising investment opportunity (see the black converging trendlines on the main chart). A developing symmetrical triangle pattern after an uptrend can be regarded as a bullish signal as it often represents a period of consolidation before the trend resumes. Should a break above the upper trendline of the triangle occur, it may confirm the continuation of the preceding uptrend.
A "buy" signal on the weekly Bollinger Bands acts as additional bullish support (see the insert). While the indicator measures volatility, when the price moves from the lower band towards the middle or upper band it suggests that selling pressure is diminishing.
Fading downside price momentum according to the MACD indicator, as well as the recent upward trajectory of the on-balance volume (OBV) indicator, supports our bullish view.
| Share Information | |
|---|---|
| Share Code | LHX |
| Industry | Capital Goods |
| Market Capital (USD) | 42.27 billion |
| One Year Total Return | 9.97% |
| Return Year-to-Date | 5.98% |
| Current Price (USD) | 222.86 |
| 52 Week High (USD) | 265.74 |
| 52 Week Low (USD) | 200.18 |
| Financial Year End | December |
| The stock appears to be finding support at its 200-day simple moving average (SMA) of $228.25 and has recently crossed its 200-week SMA. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY23 | FY24E | FY25E | FY26E | |
| Headline Earnings per Share (USD) | 12.36 | 13.07 | 14.18 | 15.64 |
| Growth (%) | 5.74 | 8.47 | 10.29 | |
| Dividend Per Share (USD) | 4.56 | 4.65 | 4.87 | 5.10 |
| Growth (%) | 2.04 | 4.73 | 4.66 | |
| Forward PE (times) | 17.05 | 15.72 | 14.25 | |
| Forward Dividend Yield (%) | 2.09 | 2.19 | 2.29 | |
| Earnings growth is expected to increase gradually over the short-to-medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | TDG US - Buy (Continue to hold) |
KMX US - Buy (Continue to hold) |
AMGN US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 1 292.86 | 76.44 | 267.10 |
| Current | 1 358.01 | 79.50 | 274.81 |
| Movement | +5.0% | +4.0% | +2.9% |
|
A smaller steep upward tilting inclining channel pattern remains of interest. Crossed above its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $1 500.00 with a trailing stop-loss $1 284.00. Exit the trade by 14 February 2025 |
A developing ascending triangle pattern remains of interest. Remains above its 200-day simple moving average. Downside price momentum is concerning.
Our profit target remains at $90.00 with a trailing stop-loss at $74.30. Exit the trade by 31 January 2025. |
A price in a steady upward trend remains of interest. Remains above its 200-week simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $300.00 with a trailing stop-loss at $260.00. Exit the trade by 26 March 2025. |
| Share Name and Position | XLK US - Buy (Continue to hold) |
DOV US - Buy (Continue to hold) |
|
|---|---|---|---|
| Entry | 230.09 | 194.48 | |
| Current | 236.06 | 194.41 | |
| Movement | +2.6% | +2.0% | |
|
A price in wave 5 of the Elliott wave pattern remains of interest. Remains above its 200-day simple moving average. Downside price momentum has halted, which is supportive.
Our profit target remains at $256.00 with a trailing stop-loss at $226.00. Exit the trade by 24 January 2025. |
Seasonal trends in the price remains of interest. Remains above its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $214.00 with a trailing stop-loss at $190.50. Exit the trade by 9 May 2025. |
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