L3Harris Technologies (LHX) has made integration progress post-mergers, but "meaningful" gaps remain, particularly across legacy business units like maritime, RBC Capital Markets said in a note emailed Wednesday.
The investment firm said continued focus on operational excellence and integration is a positive for sentiment on the company.
The company's Missile Solutions segment remains the growth driver, with an initial public offering spinoff still on the table, RBC said. Management has highlighted a longer-term margin opportunity within the segment as volumes progress and efficiencies are realized from new investments, according to the note.
The firm also noted that research and development investment for the radio portfolio, capital expansion for Missile Solutions, as well as buybacks remain the company's capital allocation priorities.
RBC Capital Markets maintained its sector perform rating on L3Harris Technologies, with a $295 price target.
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