On Sep 30, 2014, Zacks Investment Research upgraded Harris Corporation (HRS) by a notch to a Zacks Rank #2 (Buy).
Why the Upgrade?
On Sep 18, 2014, this leading supplier of communications equipment and services announced its latest contract win – a major one with the U.S. Air Force to provide Hosted Payload Solutions (HoPS) through 5 years. The deal is valued at $495 million and adds yet another feather to Harris’ cap, given that it has clinched a series of contracts over the past few days. On Sep 16, Harris had received a $19 million contract from Air Force Special Operations Command (AFSOC) of U.S. to supply Falcon III wideband tactical radios.
On Sep 12, Harris got an order for Falcon III RF-340M multi-channel manpack Radios from the U.S. Department of Defense.
A day prior to that, on Sep 11, Harris received a massive order worth $88 million from an unidentified country in the Middle East to supply its next-generation Falcon III wideband tactical radios and accessories. The company will deliver the RF-7800H wideband HF tactical radio, the RF-7850M radio and the RF-7800S lightweight soldier personal radio.
Harris’ RF Communications segment is gaining momentum in international markets and this trend is likely to continue with Harris’ Falcon III tactical radio gaining market traction.
Such regular and valuable contract wins should boost Harris’ top and bottom lines higher in the near term. Notably, Harris’ consolidated revenues in the fourth quarter of fiscal 2014 totalled $1.329 billion, down 2.2% year over year. However, the figure comfortably surpassed the Zacks Consensus Estimate of $1.299 billion.
Stocks that Warrant a Look
Some other well-placed stocks worth considering in the sector are Aruba Networks, Inc. (ARUN), General Dynamics Corporation (GD) and The Boeing Company (BA). All these stocks carry the same rank as Harris Corporation.
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