General Dynamics vs L3Harris

This page offers a detailed comparison between General Dynamics Corporation and L3Harris Technologies Inc. We delve into their respective business models, analyse their financial performance, and consider their market context to provide an overview for those interested in these defence industry stocks. Educational content, not financial advice.

This page offers a detailed comparison between General Dynamics Corporation and L3Harris Technologies Inc. We delve into their respective business models, analyse their financial performance, and cons...

Comparison Snapshot

Key Financial Metrics

GD

Metric

LHX

$97.36B

Market Cap

$65.40B

5.83%

Potential Profit

-4.12%

Buy

Analyst Rating

Buy

Why It's Moving

General Dynamics Stock Surges on Stellar Q3 Earnings and Record Backlog Signaling Robust Defense Demand

Revenue hit $12.91 billion, up 10.6% year-over-year and beating forecasts by 3.1%, driven by strong execution in every business unit.
EPS reached $3.88, surpassing expectations by $0.19 with 15.8% growth, fueled by booming Gulfstream business jet deliveries.
CEO Phebe Novakovic emphasized growing demand and solid cash flow, with raised FY-2025 guidance underscoring confidence in sustained momentum.

Sentiment:

🐃Bullish

LHX Faces Downside Scrutiny Amid Missile Spinoff Buzz and Soaring Valuation

JPMorgan hiked price target to $395 on February 5, spotlighting the Missile spinoff's value creation, yet broader Wall Street tempers enthusiasm with 'Moderate Buy' calls amid high valuations.
'LHX NeXt' slashed $1.2B in costs, boosting margins to 15.8% and free cash flow to $2.8B, but debt from Aerojet lingers at 3.0x leverage, raising funding concerns.
Defense sector tailwinds drive 72% one-year surge to ~$349, outpacing peers, though analysts caution on premium 18x forward earnings versus historical norms.

Sentiment:

🐻Bearish

General Dynamics Stock Surges on Stellar Q3 Earnings and Record Backlog Signaling Robust Defense Demand

Revenue hit $12.91 billion, up 10.6% year-over-year and beating forecasts by 3.1%, driven by strong execution in every business unit.
EPS reached $3.88, surpassing expectations by $0.19 with 15.8% growth, fueled by booming Gulfstream business jet deliveries.
CEO Phebe Novakovic emphasized growing demand and solid cash flow, with raised FY-2025 guidance underscoring confidence in sustained momentum.

Sentiment:

🐃Bullish

LHX Faces Downside Scrutiny Amid Missile Spinoff Buzz and Soaring Valuation

JPMorgan hiked price target to $395 on February 5, spotlighting the Missile spinoff's value creation, yet broader Wall Street tempers enthusiasm with 'Moderate Buy' calls amid high valuations.
'LHX NeXt' slashed $1.2B in costs, boosting margins to 15.8% and free cash flow to $2.8B, but debt from Aerojet lingers at 3.0x leverage, raising funding concerns.
Defense sector tailwinds drive 72% one-year surge to ~$349, outpacing peers, though analysts caution on premium 18x forward earnings versus historical norms.

Sentiment:

🐻Bearish

Investment Analysis

General Dynamics

GD

Pros

Substantial $90 billion contract backlog ensures revenue visibility through 2027.
Consistent revenue growth of 4-6% annually driven by stable defence sector demand.
Strong balance sheet features low long-term debt of $7.26 billion relative to $95 billion market cap.

Considerations

Moderate EPS growth of 2.61% over five years trails broader market averages.
Reliance on U.S. defence budgets exposes firm to potential policy shifts or cuts.
Cyclical exposure to government procurement delays impacts short-term profitability.

L3Harris

LHX

Pros

Diversified portfolio across IT, mission systems, and electronics bolsters resilience.
Robust backlog supports steady revenue amid rising global defence spending.
Favourable interest coverage ratio of over 16 enhances financial flexibility.

Considerations

Quick ratio of 0.78 signals potential liquidity strains in adverse conditions.
High execution risks in complex defence contracts could pressure margins.
Sensitivity to U.S. regulatory changes heightens operational uncertainties.

Related Market Insights

National Security Stocks: Could JPM's $1.5T Boost Growth?

Explore national security stocks benefiting from JPMorgan's $1.5 trillion commitment. Invest in defence, aerospace, and strategic tech with Nemo. Start from $1.