L3Harris Continued Experiencing Supply-Chain Difficulties in Fourth Quarter

Narrow-moat rated L3Harris Technologies reported mixed fourth-quarter results that featured both strong booking activity and supply chain-related constraints on production. Sales of $4.4 billion missed FactSet consensus by 3.0%, but earnings per share of $3.30 beat the same estimates by 1.1%. We are increasing our fair value estimate for L3Harris to $216 per share from $215, as the effects of Morningstar’s updated assumption that corporate tax increases will not happen were mostly offset by the effects of research and development tax credits becoming capitalized and amortized, rather than expensed.