Bank of America hikes price target on this defense stock following Pentagon investment
Bank of America sees shares of L3Harris Technologies moving higher following a massive investment from the U.S. Defense Department. The bank reiterated its buy rating on the aerospace and defense company and hiked its price objective to $400 from $350. That’s about 17% above where shares closed on Tuesday. The change comes a day after L3Harris said the Pentagon would invest $1 billion in the company’s missiles division, which is expected to become an independent business in the second half of 2026 through an IPO. LHX 1Y mountain LHX 1-yr chart “The structure enables investment in building out new solid rocket motor capacity targeting a 3x increase in production by 2030,” analyst Ronald Epstein wrote. “We reiterate Buy and raise our PO to $400 from $350 as we expect the reorganization to unlock value for LHX reflected in its multiple.” L3Harris noted that the investment would be purely financial. That is, the Defense Department is not expected to take a board seat or any other kind of governance control in the company. The analyst added that his new multiple also reflects the defensive nature of L3Harris’ stock in the current environment, alongside upside from space and the Golden Dome project. Epstein added that he expects fellow defense stocks to follow L3Harris’ lead and ramp capacity and align with the priorities of the U.S. Department of War. The defense stock has rallied 59% over the past 12 months.
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