ZACKS·2025-12-23 16:01Core Insights - L3Harris Technologies, Inc. (LHX) has secured a contract from the Space Development Agency (SDA) to develop 18 infrared satellites for the Tranche 3 Tracking Layer, valued at up to $843 million, which includes ground software and operations [1][10] - Following the announcement, LHX's share price increased by 2.7% to $295.10 on December 22, 2025 [1] Company Developments - The new tracking layer satellites will enhance the SDA's Proliferated Warfighter Space Architecture (PWSA), improving the U.S. military's capabilities to detect and defend against advanced missile threats, including hypersonic missiles [2] - L3Harris has over three decades of experience supporting space superiority missions and is a long-standing partner of the U.S. Space Force [3] - The Tranche 3 Tracking Layer solution will provide higher-resolution infrared sensing, advanced on-orbit data processing, and real-time detection algorithms to improve missile-tracking capabilities [5] - Currently, L3Harris supports the SDA's Tracking Layer with four missile-tracking satellites in orbit and an additional 34 satellites under development across Tranche 1 and Tranche 2 [6][10] Industry Outlook - The military satellite market is projected to grow at a CAGR of 10% from 2025 to 2030, driven by increasing demand for enhanced communication, surveillance, and reconnaissance capabilities [7] - Other defense companies such as Lockheed Martin Corp. (LMT), Northrop Grumman Corp. (NOC), and Airbus SE (EADSY) are also positioned to benefit from this favorable market outlook [8] - Lockheed Martin's long-term earnings growth rate is estimated at 11.94%, with a projected sales increase of 4.7% for 2025 [10] - Northrop Grumman has a long-term earnings growth rate of 4.19%, with a sales estimate of $41.88 billion for 2025, indicating a rise of 2.1% [11] - Airbus has a long-term earnings growth rate of 21.48%, with a sales estimate of $87.56 billion for 2025, suggesting a jump of 17.1% [12] Stock Performance - Over the past six months, L3Harris shares have increased by 19.6%, outperforming the industry growth of 13.9% [13]