L3Harris Partners With DoW to Boost Solid Rocket Motor Capacity

L3Harris Technologies, Inc. LHX recently announced a first-of-its-kind proposed partnership with the U.S. Department of War (DoW) to significantly expand its capacity to produce solid rocket motors for critical U.S. and allied missile systems.

Under the agreement, the DoW will invest $1 billion in L3Harris’ Missile Solutions business via a convertible preferred security, which will automatically convert into common equity upon an initial public offering (IPO). L3Harris intends to pursue an IPO of the Missile Solutions unit in the second half of 2026, establishing a public company focused on delivering critical propulsion systems at unprecedented scale and speed.

Here's How the Partnership Benefits L3Harris

The proposed partnership with the DoW strengthens L3Harris’ position in the U.S. defense industrial base by securing significant government-backed capital to rapidly expand solid rocket motor capacity. The investment reduces funding risk while supporting scale-up for high-priority missile programs such as PAC-3, THAAD, Tomahawk and Standard Missile, ensuring steady long-term demand visibility.

The planned IPO creates a focused, pure-play propulsion company, sharpening operational execution and improving transparency. This structure is expected to unlock shareholder value while allowing L3Harris to retain a controlling stake and strategic influence.

Overall, the partnership enhances LHX’s growth prospects, accelerates capacity expansion, reinforces its role as a critical defense supplier and aligns the company closely with evolving U.S. defense acquisition priorities.

Partnerships Drive Aerospace-Defense Growth

Aerospace and defense companies are increasingly leveraging partnerships to accelerate growth, enhance capabilities and strengthen market positions. These collaborations enable firms to access new technologies, expand production capacity and share risks, particularly in high-investment areas like missile systems and advanced propulsion. By working closely with government agencies, suppliers and other industry players, companies can improve operational efficiency, secure long-term contracts and meet evolving defense requirements.

Along with LHX, several other aerospace-defense players focused on strategic partnership deals to expand operations are discussed below:

Lockheed Martin Corp. LMT: In 2025, the company inked a Memorandum of Understanding with Korea Aerospace Industries to broaden its existing collaboration on air systems. The expanded partnership covers rotorcraft manufacturing, next-generation platform development, space systems, crewed-uncrewed teaming, uncrewed aerial vehicles, training devices and sustainment.

LMT has a long-term (three to five years) earnings growth rate of 11.85%. The Zacks Consensus Estimate for 2026 sales stands at $77.61 billion, which calls for an increase of 4.2%.

RTX Corporation RTX: In 2025, the company partnered with Shield AI to integrate its autonomy technology into select RTX defense products, including loitering munitions and sensors. The collaboration aims to deliver enhanced autonomous capabilities for U.S. and allied defense forces.

RTX has a long-term earnings growth rate of 10.25%. The Zacks Consensus Estimate for 2026 sales is pegged at $92.82 billion, which implies a rise of 6.6%.

The Boeing Company BA: In 2025, the company’s Defense, Space & Security unit partnered with Palantir to integrate advanced artificial intelligence and data analytics into defense production. The collaboration aims to standardize analytics and enhance decision-making across aircraft, satellites and classified systems.

BA has a long-term earnings growth rate of 31.33%. The Zacks Consensus Estimate for 2026 sales stands at $94.69 billion, which calls for a rise of 8.5%.

LHX Stock Price Movement

In the past six months, shares of L3Harris have risen 30.7% compared with the industry’s growth of 11.6%.

LHX’s Zacks Rank

LHX currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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

Zacks Investment Research