Defense Contractor L3Harris Shifts Strategy: Halts M&A To Strengthen Balance Sheet And Boost Shareholder Returns
Portfolio Pulse from Shivani Kumaresan
L3Harris Technologies Inc (NYSE:LHX) has announced the cessation of its M&A activities to focus on strengthening its balance sheet and increasing shareholder returns. The company forecasts $23 billion in revenue through 2026, with 16% segment operating margins and $2.8 billion in free cash flow. Investments will be directed towards R&D and capital expenditures, while also reducing debt to achieve a leverage ratio of 3.0x. CEO Christopher E. Kubasik emphasized operational improvements for productivity and margin expansion.
December 13, 2023 | 12:52 pm
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L3Harris Technologies Inc plans to halt M&A to strengthen its balance sheet and increase shareholder returns, with a revenue target of $23 billion through 2026 and a focus on operational improvements.
The decision to halt M&A activities and focus on internal growth and operational efficiency is likely to be viewed positively by investors, as it suggests a disciplined approach to capital allocation and a commitment to shareholder value. The clear financial targets and plans to reduce debt may also contribute to a positive outlook for the stock in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100