A recent analyst upgrade and the deepening of a strategic partnership are generating positive sentiment around defense contractor L3Harris. Combined with fresh manufacturing contracts, these developments have placed the company in a favorable light. However, the sustainability of this upward trend hinges on execution in production and the confirmation from upcoming quarterly results.
Strategic Alliance with Palantir Takes Concrete Shape
The existing collaboration with data analytics firm Palantir, initiated in 2024, is now being actively deployed to integrate artificial intelligence into manufacturing operations. L3Harris is leveraging Palantir’s Warp Speed system to accelerate production processes—such as those for night vision devices—and to bolster supply chain resilience. This initiative extends from the factory floor to field deployment scenarios, including the U.S. Army’s TITAN program, signaling a clear corporate drive toward AI-powered efficiency gains.
Firm Order Backlog and Manufacturing Expansion
In parallel, L3Harris has secured a follow-on contract worth up to $200 million for propulsion systems used in GMLRS munitions. This work will be handled at a new production facility in Camden, Arkansas, which is projected to increase annual output by more than 30%. Additionally, the company was selected as a subcontractor for communication systems within the U.S. Air Force’s E-4C program. Analysts view these contracts as tangible growth drivers for the coming years.
Analyst Upgrade Provides a Vote of Confidence
The positive narrative received a significant endorsement on December 16, when Morgan Stanley raised its rating on L3Harris from “Equal-Weight” to “Overweight,” also lifting its price target. The bank cited the company’s strong operational momentum for 2026, its broad, platform-agnostic positioning, and a reduced risk of disruption from new competitors. This move has drawn short-term market attention and underscores perceived growth potential among institutional investors.
Should investors sell immediately? Or is it worth buying L3Harris?
Technical Performance and Critical Upcoming Catalyst
The stock closed its latest session at €240.50, marking a year-to-date advance of 18.94%. It currently trades approximately 8.8% below its 52-week high. The consensus analyst view rates L3Harris as a “Moderate Buy,” with an average 12-month price target of around $336.41.
The pivotal near-term event will be the release of Q4 2025 financial results on January 29, 2026. Current forecasts anticipate earnings per share (EPS) of approximately $2.80 and revenue near $5.70 billion. Should the reported sales, margin progression, and evidence of manufacturing scale confirm the positive outlook, the recent upgrade and improved market sentiment will likely be sustained. Conversely, should results disappoint or if production and integration face delays, the current momentum could cool considerably.
In summary, while fundamental contract wins and the Palantir integration build a compelling case for L3Harris, the forthcoming quarterly figures and tangible production execution will ultimately determine whether the share price maintains its trajectory.
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