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Based in Newport News, Virginia, Huntington Ingalls Industries, Inc. (HII) designs, builds, overhauls, and repairs military ships. Valued at a market cap of $10.1 billion, the company also provides a wide range of professional services, including defense and federal solutions, nuclear and environmental services, and unmanned systems to partners in government and industry.
Companies worth $10 billion or more are generally labeled as “large-cap” stocks, and Huntington Ingalls fits right into that category. The company distinguishes itself as America's largest military shipbuilding company and is renowned for its engineering and defense technologies. It is the sole shipbuilder for amphibious ships, and has delivered 15 large-deck ships to the U.S. Navy.
Shares of HII are trading nearly 13% below their 52-week high of $299.50, which they reached on Mar. 5. The shipbuilding company has gained 3.6 over the past three months, lagging behind the broader SPDR S&P Aerospace & Defense ETF’s (XAR) 11% return over the same time frame.
In the longer term, HII stock has risen marginally on a YTD basis, lagging behind XAR’s 15.1% gains. Moreover, shares of HII have increased 29.4% over the past 52 weeks, underperforming XAR’s 39.8% returns over the same time frame.
HII has been trading below its 200-day and 50-day moving average since July despite few fluctuations, indicating a bearish trend.
HII has underperformed primarily due to persistent shipyard labor issues faced by the company coupled with experiencing weak profit margins. Furthermore, Despite reporting stronger-than-expected Q2 earnings of $4.38 per share and revenues of $2.98 billion on Aug. 1, shares of HII dropped 4.6% due to concerns over delays in key shipbuilding programs and a shift in the delivery timeline for the SSN 798 submarine from late 2024 to early 2025.
HII has also lagged behind its rival, General Dynamics Corporation (GD), which gained 39.7% over the past 52 weeks and nearly 18% on a YTD basis.
As HII underperformed relative to its industry peers, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the nine analysts covering the stock, and the mean price target of $283.10 suggests a premium of 10% to its current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
