Morgan Stanley upgraded L3Harris Technologies (NYSE: LHX) to Overweight from Equalweight and raised its price target to $367 from $350, citing strong operating momentum heading into 2026.
The analyst said L3Harris was well positioned for the future of warfare, with relatively limited disruption risk from emerging defense technology players due to its platform-agnostic strategy. This approach was reflected in the absence of major program disruptions seen at some peers in recent quarters.
Morgan Stanley said L3Harris screened as the most attractive among large defense primes based on projected revenue, earnings per share, and free cash flow per share growth from 2025 through 2028. Despite this outlook, the stock was trading at the lowest valuation in the peer group on a 2027 free-cash-flow-to-sales basis, at roughly 16x compared with a peer median near 18x.
Potential catalysts into 2026 included opportunities tied to the Golden Dome program and improving output at Aerojet Rocketdyne.
