Latest news with #HuntingtonIngallsIndustries
Yahoo
18-05-2025
- Business
- Yahoo
4 Reasons to Buy Huntington Ingalls Industries Stock Like There's No Tomorrow
Shares of Huntington Ingalls Industries have rallied at the start of 2025 as the Trump administration aims to revitalize U.S. military shipbuilding funding. The company expects to receive more than $50 billion in new contract awards over the next 20 months, adding to its extensive order backlog. The stock is well positioned for further gains, supported by solid fundamentals. 10 stocks we like better than Huntington Ingalls Industries › Huntington Ingalls Industries (NYSE: HII) has emerged as a stock market outperformer in 2025, rewarding shareholders with a solid 21% return year to date as of this writing. The defense contractor, recognized as the largest military shipbuilder in the United States, is set to capitalize on several growth tailwinds. The new Trump administration has proposed increased funding for domestic shipbuilding programs, which directly benefits the company's unique market positioning. The company's outlook is further bolstered by an extensive order backlog set to drive increasing earnings. Here are four reasons I believe shares of Huntington Ingalls are a great buy for your portfolio now. U.S. Navy aircraft carriers and nuclear-powered submarines are modern engineering marvels of unparalleled complexity, with Huntington Ingalls Industries leading innovation in the field. The company's Newport News Shipyard is the only U.S. facility capable of constructing Gerald R. Ford-class aircraft carriers, among the most technologically advanced warships globally. Huntington Ingalls' shipbuilding division also constructs Arleigh Burke-class destroyers and San Antonio-class amphibious ships, essential for surface combat and troop deployment. Additionally, the company's Mission Technologies division develops uncrewed undersea vehicles (SUUV) like the Lionfish, alongside cybersecurity solutions and AI-driven autonomous systems, highlighting its diverse defense offerings. This critical role in producing key defense assets positions Huntington Ingalls as an indispensable partner to the U.S. Department of Defense, enhancing its appeal as a potential investment. A major theme in the new Trump administration has been revitalizing U.S. military strength to counter China's advancements in high-tech systems like hypersonic missiles and AI-enhanced naval technologies. President Trump outlined plans to boost shipbuilding for national security and economic growth during a joint address to Congress in February. This was followed by an Executive Order in April titled "Restoring America's Maritime Dominance" aimed at strengthening domestic shipbuilding capabilities, enhancing maritime workforce training, and ensuring adequate commercial vessel capacity for national security. Huntington Ingalls Industries should benefit from these policy directives. With a current $48 billion order backlog, Huntington Ingalls Industries now expects more than $50 billion in additional awards in the next 20 months, adding to its growth runway and earnings potential. In the first quarter (for the period ended March 31), Huntington Ingalls reported revenue of $2.7 billion, representing a decline of 2.5% year over year, reflecting the uneven timing of large orders. Nevertheless, earnings per share (EPS) of $3.97 surpassed Wall Street estimates, driven by higher margins. Looking ahead, the company is guiding for full-year shipbuilding revenue between $8.9 billion and $9.1 billion, at the midpoint, implying an increase of 3% from 2024, with several milestone ship deliveries planned through 2026. Perhaps the biggest development for Huntington Ingalls is its recent acquisition of a new production site near Charleston, South Carolina. The facility is expected to enhance overall capacity by 20% from 2024 company levels, setting the stage for stronger top-line growth into the next decade. According to Wall Street analysts, from the current 2025 EPS estimate of $13.92, roughly flat from last year, the 2026 forecast of $16.21 points to a 16.5% increase next year. That's great news for investors eyeing the sustainability of the company's $1.35 per share quarterly dividend, yielding 2.31%. Huntington Ingalls has increased its annual dividend payment for the past 13 years, with room for more growth going forward. Where Huntington Ingalls Industries stands out is through its attractive valuation, trading at 16 times its consensus 2025 EPS as a forward price-to-earnings (P/E) ratio. This level represents a discount to defense sector peers, including companies like RTX, Lockheed Martin, General Dynamics, and Northrop Grumman, which, as a group, trade at an average forward P/E closer to 19. With a renewed strategic focus on military seapower and naval technologies, Huntington Ingalls' stock may be undervalued. I'm bullish on Huntington Ingalls Industries and believe all the pieces are in place for its share price rally to keep going. The stock is a great option for investors to add to diversified portfolios and gain exposure to high-level themes in domestic manufacturing and the defense sector. Before you buy stock in Huntington Ingalls Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Huntington Ingalls Industries wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,385!* Now, it's worth noting Stock Advisor's total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Dan Victor has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin and RTX. The Motley Fool has a disclosure policy. 4 Reasons to Buy Huntington Ingalls Industries Stock Like There's No Tomorrow was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
03-05-2025
- Business
- Yahoo
Why Huntington Ingalls Stock Gained Speed in April
Huntington Ingalls has been a laggard for years, weighed down by low-margin contracts. Washington is increasingly focused on shipbuilding, which should create opportunities for the company in the years to come. The U.S. shipbuilding industry has been in a lull since the height of the pandemic, with companies tied to pre-COVID contracts that are not nearly as profitable now. But the budget winds in Washington appear to be shifting, and Huntington Ingalls Industries (NYSE: HII) is likely to be one of the primary beneficiaries if they do. Shares of Huntington Ingalls traded up 12.9% in April, according to data provided by S&P Global Market Intelligence, as investors begin to climb on board for what they believe will be a profitable voyage. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Huntington Ingalls has long been considered one of the most vulnerable among the largest defense contractors. The company is one of the two primary shipbuilders for the U.S. Navy, but unlike its vertically integrated peers, Huntington relies on ships for nearly all its revenue. The company's shares took a plunge in February after missing earnings expectations. But investors have been slowly warming to the shares as the Washington budget process heats up. In early April, Navy Secretary John Phelan said domestic shipyards and shipbuilding are "a big, big priority for the president," and the Navy upped its long-term goal for fleet size. Late in the month, Huntington Ingalls and General Dynamics were awarded massive contracts to construct Virginia-class submarines, reinforcing the boats as a top U.S. government priority. The good news continued into the first day of May, with Huntington Ingalls announcing first-quarter results that topped analyst expectations thanks to shipbuilding margins that came in 90 basis points ahead of expectations. The company also reiterated full-year guidance, though second-quarter projections are a bit below what analysts had expected. Huntington Ingalls appears to have wind in its "sales" for the first time in years, and investors have every reason to be excited about the prospects. Trading at just 16 times earnings, Huntington Ingalls has the potential to make up ground in the quarters to come against other defense primes like General Dynamics (18.9 times earnings) and Lockheed Martin (20.7 times earnings). But as the saying goes, it takes time to turn a battleship. Investors buying in now need to be aware that these contracts can take years to play out, and funding trickles in as milestones are met. Even if the company does even better than expected when the new budget is finalized, some of those funds will only reach Huntington Ingalls' bottom line toward the end of the decade. The journey is long, but Huntington Ingalls is heading in the right direction. Before you buy stock in Huntington Ingalls Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Huntington Ingalls Industries wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $610,327!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $667,581!* Now, it's worth noting Stock Advisor's total average return is 882% — a market-crushing outperformance compared to 161% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 Lou Whiteman has positions in General Dynamics and Lockheed Martin. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy. Why Huntington Ingalls Stock Gained Speed in April was originally published by The Motley Fool Sign in to access your portfolio
Epoch Times
30-04-2025
- Business
- Epoch Times
New Shipbuilding Deal Promises Swifter Sailing for the US Navy
Commentary Recently, America's largest military shipbuilder signed a This new agreement comes as President Donald Trump has just issued an executive order on ' Virginia-based Huntington Ingalls Industries builds Arleigh-Burke destroyers, amphibious warships, aircraft carriers, and nuclear submarines for the U.S. Navy. US Navy Shipbuilders Consistently Late and Over Budget American shipbuilders like Huntington Ingalls and others have come in for quite a Hyundai Heavy Industries has, conversely, been widely praised for its efficient business practices, which enable it to deliver ships consistently on time and under budget. Indeed, the Republic of Korea has been America's capable business partner and faithful ally. More than ever, it is in the clear interest of the United States to build on that steadfast relationship and notch up the pivotal partnership to the next pragmatic level. Related Stories 4/24/2025 4/23/2025 A Partnership to Deliver the Ships the Navy Needs American policymakers have already expressed hopes that the U.S. Navy and The new agreement between Huntington Ingalls and Hyundai Heavy will focus first on the exchange of technology and best practices but could expand even further. As Huntington Ingalls President Brian Blanchett 'We're building off of the relationship that we have as builders of destroyers, both companies [are] working Aegis destroyers right now. We're certainly open to exploring everything at a corporate level, beyond just Ingalls. We'll talk component outsourcing or exploring the opportunities to provide components to destroyers. [Hyundai] has an excellent supply chain. [They have] a lot of lessons learned that they've experienced in their production of their destroyer program.' Countering the Threat From China, Ensuring Our National Security The desire for the United States to engage more with Korean and other allied shipbuilders is closely linked with the dramatic expansion of In January, the U.S. Trade Representative's Office As the U.S. shifts its strategic focus to the Defense cooperation prioritization can strengthen America's alliances and partnerships with like-minded and willing partners like the Republic of Korea that have very capable military and industrial sectors. Now is the time for Washington and Seoul to build on that strategic cooperation and further advance the time-tested alliance to new heights. Reprinted by permission from Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Yahoo
17-04-2025
- Business
- Yahoo
Is Huntington Ingalls Industries (HII) Among the Best Mid Cap Defense Stocks to Buy According to Analysts?
We recently published a list of the 10 Best Mid Cap Defense Stocks to Buy According to Analysts. In this article, we will take a look at where Huntington Ingalls Industries, Inc. (NYSE:HII) stands against other best mid cap defense stocks. Defense stocks have surged over the past week after President Trump unveiled plans for a $1 trillion defense budget for fiscal 2026, representing a 12% increase from the current year. Here is what he told reporters on April 7: 'Nobody's seen anything like it. We have to build our military and we're very cost-conscious, but the military is something that we have to build. And we have to be strong because you've got a lot of bad forces out there now. So we're going to be approving a budget and I'm proud to say actually, the biggest one we've ever done for the military.' READ ALSO: 10 Best Performing Defense Stocks So Far in 2025 and 10 Best Large Cap Defense Stocks to Buy Now. This is an encouraging development for America's defense sector, which had a subdued start to the year due to uncertainty around budget cuts. The creation of DOGE had also reshaped investors' views of the industry. Stocks got another boost last week after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. On April 7, Vietnam's prime minister issued a statement, asking for a 45-day delay in the imposition of tariffs and stating his country would buy more American goods, including arms, to tackle the trade gap. Defense stocks have soared in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While a steep selloff in response to the tariffs sparked a major plunge in shares last week, this has been a year to remember for several European defense companies that have seen double-digit returns so far in 2025. Analysts at Citi believe defense stocks are poised for outperformance due to minimal tariff exposure, increased military budgets, and rising geopolitical tensions. Jason Gursky stated the following in a detailed preview to clients on April 10: 'We materially change the rank order of our stock picks, moving our defense coverage to the top of the list given our positive view on the outlook for global defense spending.' Investors are also buoyed by the unveiling of a new next-generation fighter jet, the F-47, to replace the F-22 Raptor. President Trump has also announced that he will resurrect America's military and commercial shipbuilding industry, which he sees as vital to national security, given the strategic competition with China. A towering military warship off the shore, its hull representing the companies commitment to the defense sector. For this article, we sifted through screeners to identify mid-cap stocks in the aerospace and defense industry. These stocks have a market cap between $2 billion and $10 billion. From there, we picked the top 10 defense stocks with the highest positive share price upside potential. All data is as of the close of business on Friday, April 11, 2025. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Market Cap: $8.47 billion Share Price Upside Potential: 7.12% Huntington Ingalls Industries, Inc. (NYSE:HII) is an American all-domain defense provider, with expertise in shipbuilding, unmanned systems, cyber, ISR, and synthetic training. It is the country's sole builder of aircraft carriers and a major contractor for most nuclear submarines. With a share price upside potential of 7.12%, it is one of the best mid cap stocks to buy. The stock surged 17% during the week of April 7 in response to President Trump signing an executive order to revive American shipbuilding, aimed at reducing China's grip on the industry. On Friday, Goldman Sachs upgraded Huntington Ingalls Industries, Inc. (NYSE:HII) from Sell to Buy, and also raised its price target for the stock to $234 from $145. Another positive during the week was Huntington Ingalls Industries, Inc. (NYSE:HII)'s delivery of the initial two Lionfish small uncrewed undersea vehicles to the Navy under a multi-year program, which could scale to 200 vehicles, with a contract value of $347 million. Late last month, the company also launched the USS Jeremiah Denton (DDG 129), the third Flight III Arleigh Burke-class destroyer for the US Navy. Huntington Ingalls Industries, Inc. (NYSE:HII) recently signed a memorandum of understanding with HD Hyundai Heavy Industries to collaborate on accelerating ship production for defense and commercial projects. The strategic agreement reflects HII's commitment to expand shipbuilding capacity in support of national security. Overall, HII ranks 10th among the 10 best mid cap defense stocks to buy according to analysts. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HII but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
09-04-2025
- Business
- Yahoo
Huntington Ingalls Industries, Inc. (HII): A Bull Case Theory
We came across a bullish thesis on Huntington Ingalls Industries, Inc. (HII) on Substack by Student of Value. In this article, we will summarize the bulls' thesis on HII. Huntington Ingalls Industries, Inc. (HII)'s share was trading at $187.54 as of April 8th. HII's trailing and forward P/E were 13.43 and 13.18 respectively according to Yahoo Finance. Photo by Michael Afonso on Unsplash Huntington Ingalls Industries (HII), the largest military shipbuilder in the U.S., has entered a pivotal phase following over a decade of evolution since its 2011 spin-off from Northrop Grumman. The company operates through three core segments—Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies—each playing a distinct role in the U.S. defense industrial base. Newport News, a critical national asset as the only producer of U.S. Navy aircraft carriers and one of just two nuclear submarine builders, remains the company's backbone, though it recently posted a 4% revenue decline due to labor shortages and cost overruns on the Virginia-class submarines. Ingalls Shipbuilding, known for its construction of surface combatants, remains operationally stable with six vessels underway but is facing declining demand in the amphibious category. The most dynamic segment is Mission Technologies, which has rapidly gained momentum since the 2021 acquisition of Alion Science. With a focus on cybersecurity, artificial intelligence, and defense systems, Mission Tech has grown 19% year-over-year, now contributing 25% of revenue and expected to reach 30% by 2027. Despite this internal growth engine, HII's stock has suffered a 45% decline, largely driven by deteriorating margins on fixed-price contracts signed prior to the inflation surge, compounded by continued labor and supply chain headwinds. In Q4 2024, operating margins dropped sharply from 10.4% to 3.4%, raising investor concerns. Management, however, remains confident in a recovery, guiding toward 7.5–8% margins by 2026 through renegotiated Navy contracts and targeted workforce expansion. The company is concurrently executing a $4.1 billion shipyard modernization program aimed at reducing labor reliance and enhancing productivity through automation over the next decade. Strategically, HII is well positioned within the Navy's long-term vision of a 355-ship fleet, even as short-term headwinds persist. Its $48 billion backlog, spanning 43 vessels, provides long-term revenue visibility, and flagship programs like the Columbia-class SSBN—totaling $120 billion—anchor its future pipeline. However, the FY2025 Navy budget has dampened short-term sentiment: only six new ships will be funded (versus the 10–11 required annually), while 19 are scheduled for decommissioning, shrinking the fleet to 287 ships. Compounding matters, the submarine industrial base remains constrained, unable to consistently deliver two Virginia-class submarines annually, averaging only ~1.3 since 2022. Fixes, including increased outsourcing, industrial subsidies, and new workforce initiatives, are expected by 2028. A critical emerging trend is the Navy's shift toward unmanned underwater vehicles (UUVs), which are projected to comprise 30–50% of undersea operations by 2040. These drones excel in intelligence, surveillance, reconnaissance, mine clearance, and sabotage, often deployed from manned platforms like Virginia-class submarines. HII, with its unique dual exposure to both manned submarines and growing investments in unmanned technologies, stands to benefit from this evolving naval doctrine. While UUVs can't replace the strategic deterrence of SSBNs, they offer scalable and cost-effective solutions that align with shifting Pentagon priorities. Financially, the company has delivered a 5.2% revenue CAGR over the past decade and returned substantial capital to shareholders, repurchasing 20% of its shares and delivering a 5–6% annualized combined return through dividends and buybacks. Yet, its 2021 acquisition of Alion for $1.65 billion in cash ballooned debt levels, leaving $2.7 billion outstanding—double its pre-deal debt. While still within acceptable ranges for a prime contractor, annual debt servicing of $150–$200 million amid rising interest rates is putting pressure on free cash flow. This pressure culminated in a recent 20% drop in stock price, following management's withdrawal of its five-year free cash flow guidance due to continued margin strain. However, recovery remains plausible. Management forecasts capex peaking at 5% of revenue (~$600 million annually) through 2026, after which it will taper to 2–2.5%. If capex and debt service are reduced post-2026 and shipbuilding margins rebound to historical levels, free cash flow could reach $600 million, suggesting an FCF multiple of 11–17x at current prices. Valuation scenarios support this upside: assuming 4% annual revenue growth and margin normalization, discounted cash flow models yield a fair value of $287 per share, while conservative relative valuation estimates place it between $250–$260. Even with risk factors such as fixed-price contract exposure, skilled labor shortages, and shifting defense priorities, HII's restructuring efforts, strategic backlog, and exposure to both traditional and next-generation naval technologies offer a compelling long-term investment case with a favorable risk/reward profile. Huntington Ingalls Industries, Inc. (HII) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held HII at the end of the fourth quarter which was 20 in the previous quarter. While we acknowledge the risk and potential of HII as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HII but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
