Harris Corporation (NYSE: HRS) develops communications products/solutions for government and commercial customers.
Harris' manufactures satellite, microwave, and wireless network transmission equipment, air traffic control systems, mobile radio systems, and digital network broadcasting and management systems. The U.S. Government is Harris' largest customer.
In general, analysts see 18-23% revenue growth in fiscal year (FY) 2008 after a solid FY 2007. Government contracts should remain strong, particularly work related to support the war on terrorism.
Analysts also like HRS' global footprint and business model that's more-diverse than its peers. The Reuters FY 2007/FY 2008 EPS consensus estimates for HRS are $3.45 to $3.95.
The risks? Obviously, given that more than 40% of Harris' sales are to the U.S. Government, reduced government spending would hurt HRS's results, as would decreased corporate capital spending, or contract performance delays.
The First Call mean rating for HRS is: Buy [9 firms]. Mean 2008 target: $70.00 [high: $77, low: $59].
Stock Analysis: Harris Group is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from HRS's shares. Sell/Stop Loss if you were to purchase shares in this company: $43.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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