Defense contractor L3Harris Technologies (NYSE: LHX) recently revealed that a team led by the company has been selected to provide the Shipboard Panoramic Electro-Optic/Infrared (SPEIR) system to the U.S. Navy.
The new system will be installed on destroyers, carriers, frigates, and amphibious and landing helicopter assault ships.
Shares of the company moved up 2.2% to close at $246.39 on Monday.
The contract involves L3Harris serving as a systems integrator and prime contractor. With an initial value of $205 million, the contract’s potential value can reach $593 million, if all options are exercised through March 2031.
Management’s Take
The President of Integrated Mission Systems at L3Harris, Sean Stackley, said, “The SPEIR program leverages the technologies demonstrated as part of the Office of Naval Research’s Future Naval Capability effort known as CESARS (Combined EO/IR Surveillance and Response System) and a strong heritage of maritime Electro-Optical Sensor Systems combined with L3Harris internal investment to provide a SPEIR capability to the fleet faster, with less risk and cost than other solutions.”
Stock Rating
Overall, the Street has a Strong Buy consensus rating on the stock based on six Buys and two Holds. LHX’s average price target of $276.50 implies upside potential of 12.2% from current levels. Shares have gained 12.5% over the past year.
Bloggers’ Stance
TipRanks data shows that financial blogger opinions are 100% Bullish on LHX, compared to the sector average of 65%.
Conclusion
The new contract from the U.S. Navy will allow the company to showcase its operational capabilities and become profitable in the near term.
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