Harris is a "unique enterprise" and is driven to help customers capture value from the radio frequency spectrum, the firm said.
"The military is becoming more communications centric and HRS produces products and services that enable it to outmaneuver its opponent on the battlefield," Jefferies said in an analyst note.
The Melbourne, FL-based company is engaged in providing technology-based solutions to government and commercial customers with its subsidiaries.
Radio modernization programs, such as JTRS Rifleman and SOCOM, international radio sales and other projects amount to more than several billion dollars and could create visibility over the next few years and 2 to 3% organic growth in fiscal year 2017, Jefferies added.
Shares of Harris closed down by 0.53% to $83.12 on Thursday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate HARRIS CORP as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, increase in net income, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HRS's very impressive revenue growth greatly exceeded the industry average of 6.0%. Since the same quarter one year prior, revenues leaped by 56.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 18.3% when compared to the same quarter one year prior, going from $125.10 million to $148.00 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 35.39% is the gross profit margin for HARRIS CORP which we consider to be strong. Regardless of HRS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.17% trails the industry average.
- You can view the full analysis from the report here: HRS