L3Harris Wins $193.6M Satellites Contract For Pentagon

L3Harris Technologies has been awarded a $193.6 million firm-fixed-price contract to build missile tracking satellites for the US Pentagon.

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According to the US Department of Defense’s Space Development Agency (SDA) contract, the work involves the building of 4 satellites, the timely delivery of space vehicles and an optical wide field of view payloads. L3Harris Technologies (LHX) is expected to deliver the satellites by 2022 and the work will be performed in different locations in the US and Canada.

The contract is a part of SDA’s first phase to use satellites to identify and track missiles like intercontinental ballistic missiles that can travel long distances and are difficult to track and intercept. “The satellites will be able to provide missile tracking data for hypersonic glide vehicles and the next generation of advanced missile threats,” said SDA director Derek Tournear. (See LHX stock analysis on TipRanks)

Last month, Goldman Sachs analyst Noah Poponak removed the stock from the firm’s Conviction List and reiterated a Buy rating with a price target of $224 (potential upside of 29.4%). The analyst sees the stock as a “great opportunity” in defense considering its market position in “fast growing buckets” of the defense budget.

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus boasts 9 unanimous Buys. The average analyst price target of $233.89 implies upside potential of about 34%. That’s after shares declined 11.8% year-to-date.