This is a Scorecard review, revisiting a past LF0 research call against what actually happened.
Ticker: LHX Rating: Sell Published: 2026-08-25 Checkpoint: 2026-10-25 Entry price: $260.92 Latest price: $253.97 as of 2026-10-23 Stock return since entry: -2.7% Signal return: +2.7% Verdict: Correct so far
This is the 2-month checkpoint for this call. LF0 publishes monthly Scorecard updates through month 6, using the closest available daily close on or before the checkpoint date.
Previous checkpoint: our 1-month review (2026-09-25) was correct (stock return -8.9% since entry). Each monthly review is judged on its own date, so the verdict can change from one month to the next.
Read the original LF0 analysis
What I Said
I argued that L3Harris was already priced for durable defense earnings, so I did not see enough margin of safety to be constructive. My caution centered on the combination of 3.2x net debt/EBITDA and a rich 30.4x EV/EBITDA multiple, even though the business had just posted $1.7B of TTM operating cash flow and $1.1B of EBITDA. I also said I would only turn more positive if EBITDA stayed above $1.1B next quarter and leverage started to come down.
Peer Comparison
| Company | Return Since Entry |
|---|---|
| LHX (this call) | -2.7% |
| BAESY | -9.1% |
| EOPSF | -15.8% |
| ESLT | +2.0% |
| HAGHY | -7.6% |
| RTX | -9.2% |
Why It’s Working (Or Not)
A short position would have earned 2.7% over this tracking window, so the Sell call has been directionally right to date. The stock has slipped while most of the comparable defense names in my peer set have also been weak, which keeps the call in line with a generally soft group rather than an isolated move. More importantly, the part of my thesis that mattered most was valuation and balance-sheet cushion: the market has not rewarded the stock for the 30.4x EV/EBITDA multiple I flagged, and the leverage concern remains the key reason I was cautious. That means the original warning about limited room for error has held up better than the more constructive interpretation of the earnings base.
What Could Still Prove Me Wrong
If L3Harris keeps EBITDA above $1.1B and shows leverage moving below 3.0x, that would undercut the central reason I stayed bearish. A renewed move higher in operating cash flow alongside that improvement would make the current multiple easier to justify. If instead EBITDA slips under $1B or revenue falls back toward the level I highlighted as a warning sign, that would reinforce my Sell view rather than challenge it.
The August 2026 Cohort
Other directional calls published the same month:
| Ticker | Rating | Entry | Latest | Stock Return | Signal Return | Verdict |
|---|---|---|---|---|---|---|
| SDGR | Sell | $17.40 | $23.80 | +36.8% | -36.8% | Incorrect so far |
| VNOM | Sell | $41.67 | $46.94 | +12.7% | -12.7% | Incorrect so far |
| AES | Sell | $14.71 | $15.00 | +2.0% | -2.0% | Incorrect so far |
| OI | Sell | $6.79 | $6.47 | -4.7% | +4.7% | Correct so far |
| GTN | Sell | $4.83 | $4.58 | -5.2% | +5.2% | Correct so far |
| BA | Sell | $210.46 | $188.35 | -10.5% | +10.5% | Correct so far |
| NUTX | Buy | $188.41 | $209.59 | +11.2% | +11.2% | Correct so far |
| RRGB | Sell | $9.51 | $8.15 | -14.3% | +14.3% | Correct so far |
| ADTN | Sell | $7.76 | $6.43 | -17.1% | +17.1% | Correct so far |
| NNDM | Sell | $1.65 | $1.35 | -18.2% | +18.2% | Correct so far |
| NXE | Sell | $10.40 | $8.15 | -21.6% | +21.6% | Correct so far |
| PENN | Sell | $18.56 | $14.50 | -21.9% | +21.9% | Correct so far |
| SPHR | Sell | $147.34 | $108.94 | -26.1% | +26.1% | Correct so far |
| STXS | Sell | $1.39 | $1.02 | -26.6% | +26.6% | Correct so far |
| WGS | Sell | $77.88 | $56.15 | -27.9% | +27.9% | Correct so far |
| OWLT | Sell | $5.81 | $4.10 | -29.4% | +29.4% | Correct so far |
| LRCX | Sell | $343.48 | $230.10 | -33.0% | +33.0% | Correct so far |
| SRG | Strong Sell | $2.11 | $1.62 | -23.2% | +34.8% | Correct so far |
Sector Scorecard: Industrials
How are our Industrials calls doing overall, and where does LHX sit among them?
| Peer call | Rating | Published | Signal return |
|---|---|---|---|
| BW | Sell | 2026-06-19 | +76.6% |
| SMR | Strong Sell | 2026-07-23 | +58.4% |
| MTZ | Sell | 2026-07-05 | +55.1% |
| RCAT | Sell | 2026-07-22 | +43.4% |
| MYRG | Sell | 2026-07-17 | +35.0% |
| FIX | Sell | 2026-10-07 | +33.3% |
| PL | Sell | 2026-09-18 | +18.3% |
| JOBY | Sell | 2026-10-04 | +17.6% |
We led the league table in Industrials with 14 calls, an 86% hit rate, and a +25.8% average signal return, with BW +76.6% as the best call and CAR -13.6% as the worst. Utilities was next at 3 calls and a 67% hit rate with a +20.2% average signal return, while Financial Services posted 4 calls, a 75% hit rate, and +18.6%; Real Estate and Unclassified were thin with 2 calls each and are not ranked. At the top end, Communication Services had a 100% hit rate on 5 calls and Technology delivered 24 calls with an 88% hit rate and +16.6%, while Consumer Cyclical also went 100% on 3 calls. The weakest average signal return was Energy at +3.8% on 4 calls, and the worst single call across sectors was Technology’s NLST at -140.2%.
Sector League Table
| Sector | Calls | Hit rate | Avg signal return | Best | Worst |
|---|---|---|---|---|---|
| Industrials | 14 | 86% | +25.8% | BW +76.6% | CAR -13.6% |
| Utilities | 3 | 67% | +20.2% | FLNC +61.2% | AES -2.0% |
| Financial Services | 4 | 75% | +18.6% | MARA +39.8% | BMNR -26.3% |
| Communication Services | 5 | 100% | +16.7% | LUMN +26.7% | GTN +5.2% |
| Technology | 24 | 88% | +16.6% | CIFR +63.7% | NLST -140.2% |
| Basic Materials | 4 | 75% | +14.6% | LAR +36.7% | GFI -3.1% |
| Consumer Cyclical | 3 | 100% | +13.6% | PENN +21.9% | OI +4.7% |
| Healthcare | 7 | 71% | +12.0% | CUE +30.8% | SDGR -36.8% |
| Energy | 4 | 75% | +3.8% | TPL +17.1% | VNOM -12.7% |
| Real Estate* | 2 | 50% | +16.6% | SRG +34.8% | SKYH -1.7% |
| Unclassified* | 2 | 50% | +5.9% | NXE +21.6% | FISV -9.9% |
\* Fewer than 3 calls: not ranked.
Sector by Publish Month
| Sector | Jun 2026 | Jul 2026 | Aug 2026 | Sep 2026 | Oct 2026 |
|---|---|---|---|---|---|
| Technology | +45.8% (2) | +0.6% (7) | +22.8% (3) | +25.1% (6) | +13.9% (6) |
| Industrials | +76.6% (1) | +39.8% (5) | +6.6% (2) | +7.3% (3) | +17.0% (3) |
| Healthcare | -5.1% (1) | — | +11.7% (5) | +30.8% (1) | — |
| Communication Services | — | +17.7% (1) | +15.6% (2) | +7.6% (1) | +26.7% (1) |
| Energy | — | +17.1% (1) | -12.7% (1) | +0.9% (1) | +9.8% (1) |
| Basic Materials | — | +13.4% (1) | — | +36.7% (1) | +4.1% (2) |
| Financial Services | — | +17.1% (3) | — | — | +23.0% (1) |
| Consumer Cyclical | — | — | +13.6% (3) | — | — |
| Utilities | — | +61.2% (1) | -2.0% (1) | — | +1.2% (1) |
| Unclassified | — | — | +21.6% (1) | — | -9.9% (1) |
| Real Estate | -1.7% (1) | — | +34.8% (1) | — | — |
Each cell: average signal return to date of the calls published that month (calls in brackets). Signal return is direction-adjusted, so a positive number means our call is right.
Live LF0 scorecard: The Scorecard | Research Performance dashboard
Past performance does not guarantee future results. Nothing here is investment advice or a recommendation to buy or sell securities. Returns use LF0’s daily-close scorecard methodology.
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