Citi says L3Harris Technologies ‘ short-term growth headwinds are outweighed by expanding defense budgets. The bank resumed coverage of the defense technology stock on Monday with a buy rating and a $193 per share price target. Citi’s forecast implies roughly 15% upside from Friday’s $167.94 close. L3Harris stock has slumped nearly 19% since the start of the year, after falling in three of the five years from 2018 through 2022. LHX YTD mountain L3Harris Technologies stock. L3 is one of the Pentagon’s six prime defense contractors, manufacturing everything from command and control systems to wireless equipment, tactical radios, avionics and electronic systems and night vision equipment Citigroup analyst Jason Gursky highlighted L3’s recent efforts to expand, including the acquisition of Aerojet Rocketdyne in July for almost $5 billion and last December’s purchase of Viasat’s Tactical Data Links (TDL) unit for almost $2 billion. While short-term targets may be difficult to reach, Gursky said, L3 is still well positioned to cash in over a longer time frame. “Execution is key at this point given elevated leverage after a recent string of acquisitions,” Gursky said. “As such, earnings reports are likely to act as catalysts for the stock, with the third quarter of this year particularly important given the significant improvement in margins imbedded in second half guidance. Gursky also signaled confidence that L3 can deliver on higher forecast earnings and revenue as both the U.S. and other NATO countries increase defense spending in the wake of the war in Ukraine. “The company is experiencing broad-based demand growth across its portfolio as the U.S. and its allies invest in space-based assets to bolster ISR [intelligence, surveillance and reconnaissance] missions, communications systems to assure the ability of Western militaries to securely communicate in theater, and a litany of other capability sets to provide a tactical advantage against potential near-peer threats,” he said. — CNBC’s Michael Bloom contributed to this report.