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What L3Harris Technologies (LHX)'s Hypersonic Zeus Motor Deal With Kratos Means For Shareholders

Simply Wall St · 6d ago
  • In December 2025, Kratos Defense & Security Solutions announced a letter of intent to L3Harris Technologies for 40 Zeus 1 and 20 Zeus 2 hypersonic solid rocket motors, which L3Harris designs and manufactures to Kratos’ specifications.
  • This arrangement underscores L3Harris’s role as a key merchant supplier in hypersonic launch systems, directly linking its technology to U.S. national security test programs and advanced flight platforms.
  • We’ll now examine how this sizeable hypersonic motor order, highlighting L3Harris’s role in Kratos’ Zeus program, may influence its investment narrative.

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L3Harris Technologies Investment Narrative Recap

To own L3Harris, you generally need to believe in steady demand for advanced defense technologies and the company’s ability to execute on complex programs while managing fixed price contract risk. The Kratos Zeus hypersonic motor order reinforces L3Harris’s role as a specialist merchant supplier in a high priority area, but on its own it does not materially change the near term picture, where execution on large contracts and U.S. budget decisions remain the key catalysts and risks.

The most relevant recent announcement alongside this hypersonics news is L3Harris’s decision in February 2025 to secure a new US$2.5 billion revolving credit facility, extending liquidity to 2030. While the Kratos motor work highlights potential demand in hypersonic testing, this expanded credit line matters more for now because it underpins the company’s ability to fund ongoing programs, absorb fixed price development pressures, and continue shareholder returns if defense funding becomes less predictable.

Yet investors should also be aware that reliance on other prime contractors for key programs could still...

Read the full narrative on L3Harris Technologies (it's free!)

L3Harris Technologies' narrative projects $24.9 billion revenue and $2.7 billion earnings by 2028. This requires 5.2% yearly revenue growth and a $1.0 billion earnings increase from $1.7 billion today.

Uncover how L3Harris Technologies' forecasts yield a $335.15 fair value, a 10% upside to its current price.

Exploring Other Perspectives

LHX 1-Year Stock Price Chart
LHX 1-Year Stock Price Chart

Two Simply Wall St Community fair value estimates for L3Harris range from about US$335 to US$378 per share, showing how far individual views can stretch. Against this, the company’s dependence on other contractors for major programs raises questions about how smoothly those expectations might translate into future performance, so it is worth weighing several perspectives before deciding where you stand.

Explore 2 other fair value estimates on L3Harris Technologies - why the stock might be worth just $335.15!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.