Huntington Ingalls Industries (HII)
NYSE:HII
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Huntington Ingalls
(NYSE:HII)
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Rating:67Neutral
Price Target:
$478.00
â–²(20.08% Upside)
Action:DowngradedDate:02/06/26
The score is driven primarily by solid fundamentals (steady growth, improved leverage, strong 2025 cash generation) tempered by margin and cash-flow volatility. The earnings call supports a constructive medium-term outlook but flags meaningful program execution, capex, and near-term cash timing risks. Technicals and valuation are the main secondary drags, reflecting weaker near-term price action and a relatively high P/E with a modest dividend.
Positive Factors
Market Leadership
HII's scale as the largest U.S. military shipbuilder creates durable competitive advantages: entrenched Navy relationships, high barriers to entry, and long multi-year program cycles that secure production throughput, skilled labor pools and recurring revenue streams across political cycles.
Negative Factors
Margin Volatility
Margins have been inconsistent, with shipbuilding margins pressured and gross margin patterns atypical in 2025. Persistent margin volatility reduces earnings predictability, constrains free-cash-flow conversion, and means gains depend on sustainable throughput improvements and program execution rather than transient revenue timing.
Read all positive and negative factors
Positive Factors
Negative Factors
Market Leadership
HII's scale as the largest U.S. military shipbuilder creates durable competitive advantages: entrenched Navy relationships, high barriers to entry, and long multi-year program cycles that secure production throughput, skilled labor pools and recurring revenue streams across political cycles.
Read all positive factors
Huntington Ingalls (HII) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.53B
Dividend Yield1.53%
Average Volume (3M)453.88K
Price to Earnings (P/E)22.1
Beta (1Y)0.81
Revenue Growth2.60%
EPS Growth-18.22%
CountryUS
Employees44,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.04
Shares Outstanding39,377,170
10 Day Avg. Volume344,059
30 Day Avg. Volume453,885
Financial Highlights & Ratios
PEG Ratio2.16
Price to Book (P/B)2.63
Price to Sales (P/S)1.07
P/FCF Ratio16.83
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue1.45
Enterprise Value/Gross Profit11.39
Enterprise Value/Ebitda14.90
Forecast
1Y Price Target
$418.00Price Target Upside5.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)17.34
Revenue Forecast (FY)$12.95B
Huntington Ingalls Business Overview & Revenue Model
Company Description
Huntington Ingalls Industries, Inc. engages in designing, building, overhauling, and repairing military ships in the United States. It operates through three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. The c...
How the Company Makes Money
Huntington Ingalls generates revenue primarily through contracts with the U.S. government, particularly the Department of Defense. The company’s revenue model is largely based on fixed-price and cost-plus contracts, which provide stability and pre...
Huntington Ingalls Key Performance Indicators (KPIs)
Huntington Ingalls Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call was broadly positive: Huntington Ingalls reported solid top-line growth, record divisional revenues, improved operating performance across segments, strong free cash flow above guidance, major program deliveries and product milestones, and raised medium-term shipbuilding growth expectations. At the same time, material timing, program-level negative cumulative adjustments (notably at Newport News for CVN 80/81), near-term margin conservatism, elevated capex needs, and the importance of timely contract awards are meaningful execution risks that could temper how quickly margins and returns improve. Overall the company appears to be making measurable operational progress while still managing program and timing headwinds.Positive Updates
Consolidated Revenue and EPS Growth
2025 revenues of $12.5 billion, up 8.2% year-over-year; net earnings $605 million vs $550 million in 2024; diluted EPS $15.39 vs $13.96 in 2024 (≈10.2% increase).
Negative Updates
Shipbuilding Margin Pressure and Flat Near-Term Margin Outlook
2025 shipbuilding margin 5.9%; 2026 shipbuilding margin guidance 5.5%–6.5% (essentially flat vs 2025). Management highlighted continued choppy margin progression and conservatism in near-term guidance with reliance on throughput improvements and new contract awards to drive future margin gains.
Read all updates
Q4-2025 Updates
Positive
Negative
Consolidated Revenue and EPS Growth
2025 revenues of $12.5 billion, up 8.2% year-over-year; net earnings $605 million vs $550 million in 2024; diluted EPS $15.39 vs $13.96 in 2024 (≈10.2% increase).
Read all positive updates
Company Guidance
Management's 2026 guidance called for shipbuilding revenues of $9.7–$9.9 billion with shipbuilding margins of 5.5%–6.5%, Mission Technologies revenues of $3.0–$3.2 billion with ~5% operating margin and 8.4%–8.6% EBITDA margin, consolidated medium‑term top‑line CAGR of ~6% (shipbuilding ~6%, Mission Technologies ~5%), 2026 free cash flow of $500–$600 million (Q1 free‑cash‑flow use ≈$600 million), 2026 capital expenditures of ~4%–5% of sales (~$500–$600 million), an effective tax rate of ~17%, Q1 2026 shipbuilding revenue ≈$2.3 billion and Mission Technologies revenue ≈$700–$750 million, a 2026 throughput target of +15% (after +14% in 2025), hiring at least 6,600 workers in 2026, planned outsourcing growth of ~30% (after a 100% increase in 2025), and combined 2025–2026 free cash flow at the midpoint of ≈$1.35 billion.Huntington Ingalls Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
71
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 12.48B | 11.54B | 11.45B | 10.68B | 9.52B |
| Gross Profit | 1.58B | 1.45B | 1.65B | 1.44B | 1.37B |
| EBITDA | 1.21B | 1.06B | 1.29B | 1.18B | 1.00B |
| Net Income | 605.00M | 550.00M | 681.00M | 579.00M | 544.00M |
Balance Sheet | |||||
| Total Assets | 12.75B | 12.14B | 11.21B | 10.86B | 10.63B |
| Cash, Cash Equivalents and Short-Term Investments | 774.00M | 831.00M | 430.00M | 467.00M | 627.00M |
| Total Debt | 3.15B | 3.41B | 2.67B | 3.15B | 3.49B |
| Total Liabilities | 7.68B | 7.47B | 7.12B | 7.37B | 7.82B |
| Stockholders Equity | 5.07B | 4.67B | 4.09B | 3.49B | 2.81B |
Cash Flow | |||||
| Free Cash Flow | 794.00M | 26.00M | 678.00M | 482.00M | 429.00M |
| Operating Cash Flow | 1.20B | 393.00M | 970.00M | 766.00M | 760.00M |
| Investing Cash Flow | -521.00M | -348.00M | -236.00M | -268.00M | -1.95B |
| Financing Cash Flow | -732.00M | 356.00M | -771.00M | -658.00M | 1.31B |
Huntington Ingalls Technical Analysis
Negative
398.07
Price Trends
412.94
Negative
383.55
Positive
328.89
Positive
Market Momentum
-4.38
Negative
47.17
Neutral
55.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HII, the sentiment is Negative. The current price of 398.07 is below the 20-day moving average (MA) of 399.78, below the 50-day MA of 412.94, and above the 200-day MA of 328.89, indicating a neutral trend. The MACD of -4.38 indicates Negative momentum. The RSI at 47.17 is Neutral, neither overbought nor oversold. The STOCH value of 55.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HII.
Huntington Ingalls Risk Analysis
Huntington Ingalls disclosed 30 risk factors in its most recent earnings report. Huntington Ingalls reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Huntington Ingalls Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $96.69B | 19.57 | 26.50% | 1.55% | -0.14% | 72.35% | |
75 Outperform | $66.86B | 35.53 | 8.28% | 1.61% | 2.83% | 47.00% | |
74 Outperform | $92.14B | 21.58 | 17.57% | 1.73% | 11.86% | 17.39% | |
74 Outperform | $142.82B | 22.26 | 80.53% | 2.77% | 2.88% | -35.15% | |
68 Neutral | $16.21B | 17.04 | 12.25% | 0.09% | 1.83% | -0.73% | |
67 Neutral | $15.53B | 22.09 | 12.28% | 1.53% | 2.60% | -18.22% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
HII
Huntington Ingalls
398.07
186.42
88.08%
GD
General Dynamics
339.88
68.24
25.12%
LHX
L3Harris Technologies
355.56
140.37
65.23%
LMT
Lockheed Martin
611.58
147.19
31.69%
NOC
Northrop Grumman
680.13
151.12
28.57%
TXT
Textron
92.65
27.73
42.72%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.