Alembic Global Remains a Buy on Harris (HRS)

In a report released today, Peter Skibitski from Alembic Global maintained a Buy rating on Harris (NYSE: HRS), with a price target of $190. The company’s shares closed yesterday at $154.22.

Skibitski said:

“We had been somewhat concerned about HRS’s outlook after a competitor won a USD391m/3-year contract, this past ENVG- B program. But, because we now understand that this was just a bridge buy, we expect L-3 (LLL, Rated Overweigh) and HRS to win follow-on awards, probably within the next two months, and probably fairly small in USD terms. That being said, after viewing industry slides and speaking with Harris, we think HRS could end up with a 5- to 10-year ID/IQ-type contract for >80,000 systems by late calendar 2019, with a total value to the two contractors of nearly USD2B. While we didn’t find the full amount budgeted-for in Army budget documents, we think the recent focus on soldier lethality means that money for the program will be added to the Army’s budget in FY20-24.”

According to, Skibitski is a 5-star analyst with an average return of 18.0% and a 74.0% success rate. Skibitski covers the Consumer Goods sector, focusing on stocks such as General Dynamics Corp, L3 Technologies Inc, and Huntington Ingalls.

Harris has an analyst consensus of Strong Buy, with a price target consensus of $184.86.

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Based on Harris’ latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $1.67 billion and net profit of $216 million. In comparison, last year the company earned revenue of $1.41 billion and had a net profit of $161 million.

Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is negative on the stock.

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Harris Corp. engages in the provision of technology-based solutions for tactical communications, geospatial systems and services, air traffic management, avionics and electronic warfare, and space and intelligence. It operates through the following business segments: Communication Systems, Electronic Systems, Space and Intelligence Systems, and Corporate.

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