L3Harris (LHX) shares rallied 5.2% in the last trading session to close at $325.74. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.3% gain over the past four weeks.
Recently, the U.S. National Security Agency officially approved L3Harris’ ROVER® 6Sc Intelligence, Surveillance and Reconnaissance terminal and Tactical Network ROVER 2c handheld ISR terminal for use with the NICM100 security module. This opens up larger foreign military sales opportunities with allied nations and expanding L3Harris’s addressable market.
The investors reacted to the sharp rise in U.S. defense budget. President Trump proposed to raise military spending to about $1.5 trillion in 2027, up from $901 billion in 2026. As a result, markets reacted positively, driving defense stocks higher on expectations of stronger long-term earnings growth.
This technology and communications company is expected to post quarterly earnings of $2.79 per share in its upcoming report, which represents a year-over-year change of -19.6%. Revenues are expected to be $5.78 billion, up 4.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For L3Harris, the consensus EPS estimate for the quarter has been revised 0.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on LHX going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
L3Harris is part of the Zacks Aerospace - Defense industry. RTX (RTX), another stock in the same industry, closed the last trading session 0.8% higher at $187.17. RTX has returned 6.3% in the past month.
RTX's consensus EPS estimate for the upcoming report has changed -0.8% over the past month to $1.45. Compared to the company's year-ago EPS, this represents a change of -5.8%. RTX currently boasts a Zacks Rank of #3 (Hold).
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L3Harris Technologies Inc (LHX): Free Stock Analysis Report RTX Corporation (RTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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