L3Harris Wins $843M Deal to Produce 18 Infrared Satellites for SDA

L3Harris Technologies, Inc. LHX recently revealed that it has secured a deal from the Space Development Agency (“SDA”) to develop 18 infrared satellites for the Tranche 3 Tracking Layer. Valued at up to $843 million, the deal also covers ground software, operations and sustainment functions.

Following the news release, the company's share price rose 2.7% to reach $295.10 on Dec. 22, 2025.

These tracking layer satellites will strengthen the SDA’s Proliferated Warfighter Space Architecture (“PWSA”), enhancing the U.S. military’s ability to detect and defend against advanced missile threats, including hypersonic missiles.

LHX’s Space-Based Missile Defense Expertise

L3Harris’ space superiority capabilities underpin space domain control, protecting vital assets and preserving strategic advantages. A long-standing partner of the U.S. Space Force and other agencies, the company has supported space superiority missions for more than three decades.

L3Harris continues to drive innovation in the space sector with responsive, agile, and cost-efficient missile warning and defense solutions. As global threats intensify, the company is well-positioned to deliver multi-domain, layered capabilities to detect, track and defeat evolving threats.

The L3Harris Tranche 3 Tracking Layer solution offers higher-resolution infrared sensing, advanced on-orbit data processing and real-time detection algorithms to enhance missile-tracking capabilities. Once deployed, these satellites will integrate with the SDA’s PWSA, enabling broader coverage and stronger direct-to-warfighter connectivity.

L3Harris supports the SDA’s Tracking Layer across all existing PWSA tranches. The company currently has four missile-tracking satellites in orbit under Tranche 0, with an additional 34 satellites under development across Tranche 1 and Tranche 2.

Growth Potential for LHX & Other Defense Stocks

The military satellite market is advancing rapidly, driven by the rising demand for enhanced communication, surveillance and reconnaissance, along with greater resilience against future threats. To this end, per a report by Mordor Intelligence, the military satellite market is projected to witness a CAGR of 10% during 2025-2030. This favorable market outlook is expected to benefit L3Harris, a leading provider of space-based defense solutions.

Given the strong growth outlook for the military satellite market, other defense majors such as Lockheed Martin Corp. LMT, Northrop Grumman Corp. NOC and Airbus SE EADSY, which have a significant presence in this domain, are also well-positioned to benefit.

Lockheed Martin leverages advanced technologies to develop layered space defense capabilities. Its LM 400 multi-mission satellite can be customized for a wide range of missions, offering a highly flexible bus architecture that enables faster deployment at lower price points while supporting data transport, missile warning and tracking operations.

LMT has a long-term (three to five years) earnings growth rate of 11.94%. The Zacks Consensus Estimate for 2025 sales stands at $74.40 billion, which calls for an increase of 4.7%.

Northrop Grumman’s military satellite communication solutions are backed by more than 40 years of mission expertise. Its Protected Tactical SATCOM Rapid Prototype is specifically designed to provide uninterrupted, real-time connectivity to warfighters, even under intense and advanced jamming conditions.

NOC has a long-term earnings growth rate of 4.19%. The Zacks Consensus Estimate for 2025 sales is pegged at $41.88 billion, which implies a rise of 2.1%.

Airbus, through its military satellite communications, offers a comprehensive portfolio that includes SATCOMBw, Syracuse 4A and 4B, and Skynet systems. The company has been a long-term operator of the SATCOMBw secure satellite communications system for the German Armed Forces.

EADSY has a long-term earnings growth rate of 21.48%. The Zacks Consensus Estimate for 2025 sales is pinned at $87.56 billion, which suggests a jump of 17.1%.

LHX Stock Price Movement

In the past six months, shares of L3Harris have risen 19.6% compared with the industry’s growth of 13.9%.

LHX’s Zacks Rank

LHX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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