L3Harris Technologies (LHX) is strengthening its missile defense footprint after securing a landmark $4.7 billion contract from Lockheed Martin (LMT).
Announced on September 8, 2026, the seven-year undefinitized contract award covers propulsion systems for the PAC-3 Missile Segment Enhancement interceptor, known as the MSE.
The award represents L3Harris’ largest PAC-3 propulsion contract to date and provides significant forward visibility into the company’s production pipeline.
The contract specifically covers production of the PAC-3 MSE’s two-pulse solid rocket motor, Lethality Enhancer, and Attitude Control Motors, all critical interceptor components.
These propulsion systems are expected to sustain and grow production volumes as global demand for missile-defense capabilities continues to accelerate.
The agreement builds on the existing procurement framework established among L3Harris, the Department of War, and Lockheed Martin, reinforcing longstanding supply chain relationships.
To meet rising production requirements, L3Harris broke ground in June on two new facilities at its Camden, Arkansas site, both expected to become operational in 2027.
The new facilities are designed to increase production throughput and modernize solid rocket motor manufacturing as the company scales to meet expanded demand.
The PAC-3 award follows a strong second quarter for L3Harris’ Missile Solutions segment, which posted revenues of $1.05 billion, a 14% year-over-year increase.
That revenue growth was driven by higher Propulsion Systems production and development volumes across missile and munitions programs throughout the period.
The segment closed the second quarter with $10.5 billion in contractual backlog, providing a substantial base of future work ahead of the new PAC-3 award.
Lockheed Martin, as prime contractor for the PAC-3 MSE interceptor, stands to benefit directly from higher production volumes supported by L3Harris’ propulsion work.
RTX Corporation (RTX) also maintains exposure to the Patriot air-defense architecture through its own missile-defense systems and interceptor programs.
The Zacks Consensus Estimate projects L3Harris earnings per share growth of 9.79% in 2026 and 14.44% in 2027, reflecting steady financial momentum.
LHX shares are currently trading at a forward 12-month price-to-sales ratio of 1.93x, a discount compared to the industry average of 2.36x.
Over the past year, LHX shares have declined 7.2%, a slightly better performance than the broader industry’s 7.7% drop during the same period.
LHX currently carries a Zacks Rank of 3, indicating a Hold rating as investors assess the long-term revenue impact of the new propulsion contract.
