L3Harris Technologies, Inc. LHX is expanding its missile propulsion production capabilities as demand for critical defense systems increases. The company’s Aerojet Rocketdyne (AR) segment provides propulsion technologies for strategic defense, missile defense, hypersonic and tactical systems. In September 2026, L3Harris received a contract valued at more than $6 billion over seven years to significantly expand propulsion production for the Terminal High Altitude Area Defense (THAAD) system.
The propulsion business is already benefiting from higher production activity. AR revenues increased 10% year over year to $2.85 billion in fiscal 2025, driven primarily by higher Missile Solutions revenues from increased production volumes on key missile and munitions programs and new program ramps. Rising production activity could therefore provide an important growth avenue as additional capacity comes online.
L3Harris is also investing in manufacturing infrastructure to support higher output. The company plans to expand its large solid rocket motor production facility in Camden, AR, with a related lease expected to commence in January 2028 after construction is completed. It also operates facilities in Huntsville, AL, West Palm Beach, FL, Cincinnati, OH and other U.S. locations, providing a broad manufacturing footprint.
The September 2026 THAAD award, combined with rising missile production and capacity expansion, could strengthen the long-term growth prospects of L3Harris’ propulsion business. Greater production capacity should help the company support larger program volumes and capitalize on growing defense demand.
Companies Expanding Missile Propulsion Capacity
Growing demand for missile systems is encouraging defense companies to expand solid rocket motor production and manufacturing infrastructure. Northrop Grumman Corporation NOC and RTX Corporation RTX are also investing in propulsion capacity and technologies.
Northrop Grumman is expanding solid rocket motor capacity across its U.S. facilities, including investments in Utah, West Virginia and Maryland.
RTX’s Raytheon is advancing solid rocket motor technologies while supporting efforts to establish additional U.S. production capacity for advanced missile propulsion.
Earnings Estimates for LHX
The Zacks Consensus Estimate for 2026 and 2027 earnings per share suggests year-over-year growth of 10.16% and 14.48%, respectively.
Image Source: Zacks Investment Research
LHX Stock Is Trading at a Discount
LHX is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 1.75X compared with the industry average of 2.11X.
Image Source: Zacks Investment Research
LHX Stock Price Performance
Over the past month, LHX’s shares have fallen 6.6% compared with the industry’s 7.4% decline.
Image Source: Zacks Investment Research
LHX’s Zacks Rank
LHX stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
L3Harris Technologies Inc (LHX): Free Stock Analysis Report
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
RTX Corporation (RTX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).