L3Harris Surges 2.59% on $200M Rocket Contract and Strategic Expansion

Summary
• L3Harris (LHX) surges 2.59% to $284.55, driven by a $200M GMLRS propulsion contract and new Arkansas facility
• New Camden, Arkansas plant boosts production capacity by 30%, signaling long-term demand
• Meadowlands EW system secures international partnerships, expanding offensive space capabilities
• Technicals show bullish momentum with RSI at 39.3 and 200-day MA at $255.71

L3Harris Technologies is surging on a dual catalyst: a landmark $200 million contract for guided rocket propulsion units and strategic infrastructure expansion. The stock has climbed 2.59% to $284.55, trading near its 52-week high of $308.12. With production capacity set to rise by 30% via a new Arkansas facility and a $36.3 billion backlog, investors are betting on sustained demand for defense propulsion and electromagnetic warfare systems.

Defense Production Catalysts Ignite L3Harris Rally
L3Harris’ 2.59% intraday surge is directly tied to two high-impact developments. First, the $200 million GMLRS propulsion contract—its largest 12-month award from Lockheed Martin—validates the company’s propulsion expertise and new Arkansas facility. This facility, funded by the Defense Production Act, will increase annual output by 30%, addressing surging military demand. Second, the Meadowlands electromagnetic warfare system’s international certification underscores L3Harris’ role in U.S. space dominance, aligning with Pentagon priorities. These catalysts, combined with a $53.4 billion market cap and 34.43% YTD gain, position the stock as a beneficiary of defense-sector tailwinds.

Aerospace & Defense Sector Gains Momentum as L3Harris Outpaces Peers
The Aerospace & Defense sector is showing resilience, with L3Harris outperforming its sector leader, Lockheed Martin (LMT), which rose 0.22% intraday. While LMT’s modest gain reflects broader sector stability, L3Harris’ 2.59% jump highlights its unique positioning in propulsion and EW systems. The sector’s 16.29% YTD return lags L3Harris’ 34.43%, underscoring its premium valuation and execution-driven growth. Investors are rotating into defense plays with clear production scalability, such as L3Harris’ new Arkansas facility, which differentiates it from peers reliant on slower-paced R&D cycles.

Options and ETFs to Capitalize on L3Harris’ Bullish Momentum
• 200-day MA: $255.71 (well below current price)
• RSI: 39.3 (oversold territory)
• MACD: -3.08 (bullish crossover potential)
• Bollinger Bands: $266.39–$298.48 (current price near upper band)

L3Harris is trading near its 52-week high with technicals suggesting a continuation of its bullish trend. Key support at $277.60 (30D) and resistance at $284.89 (intraday high) define a tight trading range. The RSI at 39.3 indicates oversold conditions, while the MACD histogram’s positive divergence hints at upward momentum. For leveraged exposure, consider XSD (Aerospace & Defense ETF) or DFEN (3x leveraged defense ETF), though the latter’s high beta (0.66) requires caution.

Top Options Picks:
• LHX20251219C280 (Call, $280 strike, 12/19 expiry):
- IV: 14.18% (low)
- Leverage Ratio: 44.14%
- Delta: 0.8105 (high)
- Theta: -0.6337 (high decay)
- Gamma: 0.0403 (moderate)
- Turnover: 2,531
- Payoff (5% upside): $34.25 per contract
- Why: High leverage and liquidity make this ideal for aggressive bulls expecting a breakout above $285.

• LHX20251219C285 (Call, $285 strike, 12/19 expiry):
- IV: 20.20% (moderate)
- Leverage Ratio: 68.00%
- Delta: 0.5387 (moderate)
- Theta: -0.5508 (high decay)
- Gamma: 0.0416 (high)
- Turnover: 2,560
- Payoff (5% upside): $42.25 per contract
- Why: Balances leverage and time decay, ideal for capitalizing on a sustained rally toward $300.

Action: Aggressive bulls should target LHX20251219C280 for a breakout above $285, while LHX20251219C285 offers a safer entry for a mid-term rally. Both contracts benefit from high gamma, amplifying gains if the stock gaps higher.

Backtest L3Harris Stock Performance
The backtest of Lockheed Martin (LHX) following a 3% intraday surge from 2022 to the present shows a strategy return of 31.43%, with a benchmark return of 44.43% and an excess return of -13.00%. The strategy has a CAGR of 7.23% and a maximum drawdown of 0.00%, indicating a stable performance with no significant losses during the period.

L3Harris Poised for Breakout—Act on Strategic Catalysts
L3Harris’ 2.59% surge is underpinned by a $200 million propulsion contract and strategic infrastructure expansion, positioning it as a key beneficiary of defense-sector tailwinds. With technicals showing oversold conditions and a 30% production capacity boost on the horizon, the stock is primed for a continuation of its bullish trend. Investors should monitor the $285 intraday high as a critical breakout level and watch for follow-through volume. Meanwhile, sector leader Lockheed Martin (LMT) gained 0.22%, underscoring the sector’s resilience. For those seeking leverage, LHX20251219C280 offers high-reward potential if the stock gaps above $285. Position now ahead of the 12/19 expiry to capitalize on this momentum.