TLDR
- L3Harris signed a seven-year framework agreement with the Department of War and Lockheed Martin for PAC-3 MSE propulsion system production
- The deal will allow L3Harris to nearly triple production of PAC-3 propulsion products
- LHX stock opened at $300.08, trading below its 200-day moving average of $328.70
- Q1 earnings came in at $2.72 EPS, beating estimates of $2.53, with revenue up 11.9% year-over-year to $5.74 billion
- Analyst consensus sits at “Moderate Buy” with an average price target of $361.70
L3Harris Technologies landed a major defense deal on Monday, signing a seven-year framework agreement with the Department of War and Lockheed Martin for long-term production of PAC-3 Missile Segment Enhancement propulsion systems.
LHX stock opened at $300.08, up 1.60% on the day, though still trading well below its 200-day moving average of $328.70.
L3Harris Technologies, Inc., LHX
The contract covers three key components of the PAC-3 MSE interceptor: the two-pulse solid rocket motor, Attitude Control Motors, and the Lethality Enhancer. The latter is an explosive device designed to increase the kill radius of the ground-based PAC-3 against threats including cruise missiles.
Ken Bedingfield, President of Missile Solutions at L3Harris, said the company is already preparing its facilities and suppliers to handle the expected production increase.
Through a framework agreement with the @DeptofWar and @LockheedMartin, we're scaling propulsion production for PAC-3 MSE to meet growing demand. This model allows us to move faster, ramp production and deliver at unprecedented rates: https://t.co/r2MuMAColN pic.twitter.com/HqkOXfdoQ0
— L3Harris (@L3HarrisTech) July 27, 2026
The agreement is expected to be finalized later this year and uses multi-year procurement authorities to lock in a long-term contract structure.
Production Ramp-Up
To support the deal, L3Harris is investing heavily in its manufacturing footprint. The company is constructing approximately 60 facilities and adding or upgrading nearly one million square feet of manufacturing and office space across solid rocket motor production sites in Alabama, Virginia, and Arkansas.
The PAC-3 MSE motor manufacturing facility is based in Camden, Arkansas, and features dedicated processing bays and automated digital X-ray equipment. Under the new agreement, L3Harris expects to nearly triple output from that site.
The contract win comes on the back of a strong most recent quarter. L3Harris reported earnings of $2.72 per share for Q1, beating the consensus estimate of $2.53 by $0.19. Revenue came in at $5.74 billion, topping estimates of $5.42 billion and rising 11.9% year-over-year.
The company reaffirmed its fiscal 2026 EPS guidance of $11.40 to $11.60, with analysts expecting full-year EPS of $11.54.
Institutional Activity
Institutional investors own 84.76% of L3Harris stock. SummitTX Capital L.P. opened a new position in Q1, buying 33,849 shares valued at approximately $11.68 million.
Several other firms added to existing positions during the fourth quarter, including REAP Financial Group, American National Bank & Trust, and Turtle Creek Wealth Advisors.
On the analyst side, Sanford C. Bernstein has an “outperform” rating with a price target of $405.00. Truist Financial upgraded LHX to “strong-buy” in May. UBS holds a “neutral” rating with a $330.00 target. The stock’s consensus target of $361.70 sits about 20% above the current price.
L3Harris also declared a quarterly dividend of $1.25 per share, payable September 18th to stockholders of record on September 4th. That works out to $5.00 annually, representing a 1.7% yield.
The stock has a 12-month trading range of $262.98 to $379.23 and a market cap of $55.90 billion.
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