Here’s my assumptions:

Risk Free Rate (10 Years Interest Rate Swap): 4,415%

Risk Premium (Taken from the Aswath Damodaran equity premium spreadsheet): 4.6%

Interest Rate Spread on The Risk free rate ( For the cost of debt calculation): 3.5%

Last 24 months Beta: 0.9

HISTORICAL DATA

Revenue growth in the last 10 years (CAGR): 19.58%

Earnings growth in the last 10 years (CAGR): 15.55%

Unlevered Free Cash Flow growth in the last 10 years (CAGR): 22.7%

FUTURE ASSUMPTIONS

End of Year FCF growth: 6%

Growth until end of 2026: 15%

Growth until end of 2034: 6%

Perpetual growth: 3%

Net Debt: 12.371B

Stock Options Present Value Assumption: $0.138B

Restricted Stock Units Present Value Assumption: $0.154B

Stock Valuation based on these assumptions: $348

Last update 12/29/2024

All the content in this newsletter should be taken as informational content only. THIS IS NOT FINANCIAL ADVICE! Do your own Due Diligence before investing or contact a professional financial advisor.

I don’t have a position in L3 HARRIS (LHX) and I don’t plan to add a position in the coming days.