DRS vs LHX: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of October 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: LHX is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DRS and LHX share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DRS and LHX exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Leonardo DRS is a defense-technology company that designs and builds advanced electronics and systems for the US military and allied forces. A majority-owned subsidiary of Italy's Leonardo, the company focuses on areas where it holds differentiated technology: advanced sensing and electro-optical infrared systems, electric power and propulsion for naval vessels, force protection, computing and network systems, and electronic warfare. Its products include infrared sensors and targeting systems for vehicles and aircraft, power-conversion and propulsion equipment for Navy ships and submarines, and tactical computing and communications gear used across the battlefield. Leonardo DRS earns revenue primarily through long-cycle US Department of Defense contracts and programs, with a backlog of orders that provides multi-year visibility. The company benefits from positions on major programs such as next-generation naval power systems and ground-vehicle sensing, areas tied to military modernization priorities. After a 2022 merger that brought it public, Leonardo DRS trades on the Nasdaq and is headquartered in Arlington, Virginia, positioning itself as a pure-play, technology-focused defense supplier rather than a full platform prime. Over the trailing twelve months to June 2026 it generated about $3.8 billion of revenue, up about 10% year over year in the latest quarter, and about $322 million of net income. In October 2026 it added a string of awards, including a three-year counter-drone sensing contract with a ceiling of up to $500 million, a $63 million production order for soldier weapon sights, a US Army thermal-sensing development award and a 10-year NASA SEWP VI contract vehicle.

Full DRS guide

L3Harris Technologies is a major US defense and aerospace contractor formed by the 2019 merger of L3 Technologies and Harris Corporation. It positions itself as an agile defense-technology company spanning communications, sensors, electronic warfare, space, intelligence, and missile systems. The business is organized into segments covering Space and Airborne Systems (avionics, sensors, electronic warfare, space payloads), Integrated Mission Systems (ISR, maritime, electro-optical), Communication Systems (tactical radios, secure communications), and, following its acquisition of Aerojet Rocketdyne, a propulsion segment that makes rocket motors and missile propulsion for the US military and space programs. L3Harris primarily sells to the US Department of Defense, allied governments, and intelligence agencies under long-term contracts, which gives it durable, often multi-year revenue backed by defense budgets. It makes money by designing, building, and supporting mission-critical hardware and software, then earning long-tail revenue from sustainment, upgrades, and spare parts. The company also pursues cost-savings programs to expand margins after its large merger and acquisitions. Over the trailing twelve months to mid-2026 it generated about $22.9 billion of revenue (up about 8% year over year in the latest quarter) and about $1.9 billion of net income. In its second quarter of 2026 revenue reached about $5.88 billion and EPS of $3.63 came in well above the roughly $2.84 consensus. In October 2026 it signed a teaming agreement with Divergent Technologies to raise production of lower-cost munitions. Headquartered in Melbourne, Florida, with about 45,000 employees.

Full LHX guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• DRS drivers: Advanced sensing and electro-optics; Naval power and propulsion.
• LHX drivers: Rising global defense spending; Diversified mission-critical portfolio.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Leonardo DRS depends heavily on the US defense budget and program funding, which are subject to political appropriations risk, continuing resolutions, and potential cuts. For LHX, l3Harris depends heavily on US government and allied defense budgets, so spending cuts, continuing resolutions, government shutdowns, or shifting priorities directly threaten revenue.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick DRS if you believe its drivers more; LHX if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the DRS and LHX guides.

DRS. At about $35 a share, DRS trades near 30 times trailing earnings and about 24 times forward estimates, a lower multiple than earlier in 2026 after a roughly 22% three-month slide. Consensus for the September quarter, reported October 29, 2026, is about $0.35 a share on roughly $1.03 billion of revenue, and analysts expect full-year 2026 revenue of about $3.95 billion. Majority parent ownership still limits the public float.

LHX. At about $243 a share, L3Harris trades near 24.5 times trailing earnings but about 18 times forward earnings, because analysts expect EPS to keep growing at a low-double-digit pace into 2027. The share price has fallen about 20% in 2026 while earnings rose and the last four quarters all beat estimates, so the multiple has compressed with sector sentiment rather than with the results. The analyst mean target of about $317 sits well above the current price, though several firms trimmed targets in October.

Headline figures (approximate, October 2026): DRS shows revenue (ttm) ~$3.8 billion, revenue growth (latest quarter, yoy) ~10%, operating / net margin ~11% / ~8.5%, net income (ttm) ~$322 million; LHX shows revenue (ttm) ~$22.9 billion, revenue growth (latest quarter, yoy) ~8%, operating margin ~12.6%, net income (ttm) ~$1.9 billion.

DRS and LHX are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DRS and LHX exposure against your real portfolio. It is not an investment adviser.