Core Insights - HII's Mission Technologies division has been awarded a contract to provide live training solutions to the U.S. Army, with a ceiling of $379 million [1][2] - The contract will support the Army's Live Training, Ranges and Combat Training Centers (LTRaC) and includes modernization and development efforts for live-fire ranges [2][3] - HII is recognized as the largest military shipbuilder in the U.S. and has a long history of contributing to national security [4][5] Company Overview - HII is a global defense provider focused on delivering advanced ships and all-domain solutions to enhance national security [4] - The company employs a workforce of 44,000 and has over 135 years of experience in the defense sector [5] - HII specializes in multi-domain training, providing realistic live and synthetic training environments for mission rehearsal [3][5]

Core Points - HII's Ingalls Shipbuilding division honored the 2025 class of master shipbuilders for their 40 years of continuous service, recognizing their contributions to national security and workforce development [1][2] - The ceremony featured a tribute video showcasing personal stories and career highlights of the master shipbuilders, emphasizing their shared commitment to building advanced naval ships [2] Company Overview - HII is the largest military shipbuilder in the U.S. with over 135 years of history in advancing national security, providing capabilities from ships to unmanned systems and cyber solutions [10] - The company employs a workforce of 44,000 and is dedicated to delivering powerful ships and all-domain solutions to protect peace and freedom globally [9][10] Employee Recognition - Master shipbuilders represent the highest level of skill and dedication within Ingalls Shipbuilding, with employees like Larry Stevens and Denise Quave reflecting on their experiences and the importance of mentoring the next generation [5][6][7] - The recognition of master shipbuilders highlights the company's commitment to workforce culture and community impact [2][5]

Core Viewpoint - Huntington Ingalls (HII) has been upgraded to a Zacks Rank 2 (Buy), reflecting an upward trend in earnings estimates, which significantly impacts stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining near-term stock price movements, making it a valuable tool for investors [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that influence stock prices [4]. Business Outlook for Huntington Ingalls - The upgrade indicates a positive outlook for Huntington Ingalls' earnings, suggesting potential buying pressure and an increase in stock price [3][5]. - Analysts have raised their earnings estimates for Huntington Ingalls, with the Zacks Consensus Estimate increasing by 3.2% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - The upgrade to Zacks Rank 2 places Huntington Ingalls in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Insights - HII showcased its defense technology portfolio at the DefenseTech LIVE event, emphasizing collaboration and innovation in national security and defense [1][2] - The event featured hundreds of government and industry leaders, highlighting HII's interactive technology showcase and strategy sessions focused on enhancing mission readiness [2][5] - HII's Mission Technologies division is committed to advancing defense capabilities across all domains, including land, sea, air, space, and cyberspace [7][9] Technology Focus - Key session topics included next-generation defense innovation, combined joint all-domain command and control, unmanned maritime operations, full-spectrum cyber operations, and battlefield electronic warfare [6] - HII's technology portfolio includes AI, big data, unmanned systems, cyber operations, and spectrum engineering, aimed at enabling mission readiness [7][11] Company Overview - HII is the largest military shipbuilder in the U.S. with over 135 years of experience in advancing national security [10] - The company employs a workforce of 44,000 and is dedicated to delivering powerful ships and all-domain solutions to protect peace and freedom globally [9][10]

Core Insights - The article compares Huntington Ingalls (HII) and RTX (RTX) to determine which stock is more attractive for value investors [1] Valuation Metrics - HII has a forward P/E ratio of 15.61, while RTX has a forward P/E of 23.20 [5] - HII's PEG ratio is 1.41, indicating a more favorable valuation compared to RTX's PEG ratio of 2.50 [5] - HII's P/B ratio is 1.84, compared to RTX's P/B of 2.92, suggesting HII is undervalued relative to its book value [6] Investment Ratings - HII currently holds a Zacks Rank of 2 (Buy), while RTX has a Zacks Rank of 3 (Hold), indicating a stronger outlook for HII [3][6] - HII's Value grade is B, whereas RTX's Value grade is C, further supporting HII as the more attractive option for value investors [6]

Noah Poponak, CFA +1(212)357-0954 | 28 May 2025 | 8:44AM EDT Huntington Ingalls Industries Inc. (HII): Management meeting takeaways: substantially increased support of US Navy shipbuilding is We hosted a group investor meeting with Huntington Ingalls management, including CEO Christopher Kastner, CFO Thomas Stiehle, and VP Investor Relations Christie Thomas. Investor conversation focused on the proposed defense reconciliation legislation and recent Navy contract modifications, how HII is navigating labor an ...

Financial Data and Key Metrics Changes - The company aims to increase throughput by 20% this year compared to last year, alongside significant cost savings across all business segments [3] - The company has a free cash flow guidance of $300 million to $500 million for the year, with performance on ship deliveries and contract negotiations influencing the outcome [112] Business Line Data and Key Metrics Changes - The company secured two ships under contract in Block V at the end of Q1, with plans to contract the next 15 submarines, which will provide a solid workload for the next 15 to 20 years [3][9] - The company is focused on improving retention and increasing outsourcing and insourcing to enhance throughput [31] Market Data and Key Metrics Changes - There is significant demand for both defense and commercial shipbuilding, with the company expressing confidence in the outlook for the next decade [6][9] - The company has seen a stable supply chain post-COVID, with investments flowing into the supply chain helping to stabilize operations [26] Company Strategy and Development Direction - The company is prioritizing execution in shipbuilding, with a focus on increasing throughput and reducing costs [3] - The establishment of a White House office for shipbuilding is viewed positively, as it provides a voice for the administration to the Navy and Congress [12][13] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about the support for shipbuilding from the government and believes that the demand will continue to grow [6][9] - The company is working closely with the Navy and Electric Boat to analyze investments required to increase throughput and achieve necessary margins [59] Other Important Information - The company is addressing labor challenges by focusing on hiring more experienced personnel and increasing wages to attract high-quality individuals [22][56] - The company has a significant backlog in Mission Technologies, with nearly $12 billion in awards last year, indicating strong performance in that segment [101] Q&A Session Summary Question: What are the company's most important priorities right now? - The company emphasizes execution, increasing throughput, and securing new contracts as its main priorities [3] Question: How does the reconciliation bill impact shipbuilding? - Management believes the reconciliation bill provides significant support for shipbuilding, although the specifics of its interaction with the 2026 budget are still unclear [6] Question: What is the outlook for the Columbia Class Bill? - The company reports that the second boat is progressing well, with significant learning from the first boat leading to improved cost performance [44] Question: How is the company managing labor challenges? - The company is focusing on hiring experienced workers and increasing wages to reduce attrition and improve workforce quality [22][56] Question: What are the expectations for future cash flow? - Future cash flow will depend on executing ship deliveries and achieving throughput goals, with potential for higher cash flow if these targets are met [112] Question: What is the company's strategy for Mission Technologies? - The company is bundling capabilities in electronic warfare, C5ISR, and uncrewed vehicles to pursue government contracts effectively [99][100]

Core Insights - HII hosted members of the UK House of Commons Defence Committee to support the AUKUS partnership, focusing on providing Australia with nuclear-powered submarines and advanced capabilities [2][3][6] Group 1: AUKUS Partnership - The visit by the Defence Committee was aimed at reinforcing the trilateral AUKUS partnership, which involves Australia, the UK, and the US [2][3] - HII is committed to supporting AUKUS objectives, including the construction of nuclear-powered submarines and enhancing industrial capacity across the involved nations [6][7] Group 2: Workforce Development - HII showcased its workforce development expertise during the visit, emphasizing the importance of skilled labor in supporting AUKUS initiatives [3][6] - The company is a founding member of the AUKUS Workforce Alliance, aimed at preparing a skilled workforce for Australia's nuclear-powered submarine program [7] Group 3: Industrial Capabilities - HII's Newport News Shipbuilding division is one of only two shipyards capable of designing and building nuclear-powered submarines for the US Navy [7] - The integration of submarine and shipbuilding capabilities among the US, UK, and Australia is crucial for aligned defense production and supply chain collaboration [6][7]

Core Viewpoint - Huntington Ingalls Industries (HII) presents a strong investment opportunity in the Aerospace Defense industry due to rising earnings estimates, robust return on equity (ROE), effective debt management, a solid backlog, and shareholder-friendly initiatives [1] Earnings Growth and Revenue Forecast - The Zacks Consensus Estimate for HII's 2025 earnings per share (EPS) has increased by 3.3% to $14.31 per share over the past 30 days [2] - The total revenue estimate for HII in 2025 is $11.91 billion, reflecting a year-over-year growth of 3.3% [2] - HII's earnings growth rate over the next three to five years is projected at 11% [3] - The company has consistently surpassed earnings expectations, achieving an average earnings surprise of 4.20% in the last four quarters [3] Return on Equity - HII's current ROE stands at 12.26%, outperforming the industry average of 10.75%, indicating more effective use of funds compared to peers [4] Shareholder Initiatives - HII has been enhancing shareholder value through dividends, currently paying a quarterly dividend of $1.35 per share, which translates to an annualized dividend of $5.40 [5] - The company's dividend yield is 2.40%, surpassing the Zacks S&P 500 Composite's average of 1.27% [5] - In the first quarter of 2025, HII paid dividends totaling $53 million [5] Backlog and Order Growth - HII's order growth remains strong, with new contract awards valued at nearly $2.1 billion in the first quarter of 2025, leading to a total backlog of $48.05 billion as of March 31, 2025 [6] - This significant backlog is favorable for the company's revenue generation prospects in the coming years [6] Debt Profile - HII's total debt to capital ratio is 40.15%, which is better than the industry average of 52.09% [7] - The times interest earned (TIE) ratio at the end of the first quarter of 2025 was 7.3, indicating the company can comfortably meet its interest payment obligations [7] Stock Performance - Over the past three months, HII shares have increased by 28%, significantly outperforming the industry's growth of 8% [8]

Industry Overview - The aerospace defense industry is experiencing growth despite supply-chain challenges, driven by increased defense budgets and positive projections for global air passenger numbers in the second half of 2025 [1][3] - A White House report indicates a proposed 13% increase in U.S. defense spending to $1.01 trillion for fiscal year 2026, which is expected to benefit defense-focused companies [4] - The Zacks-defined Aerospace – Defense Industry ranks in the top 16% of Zacks Industry Rank, suggesting it will outperform the market in the next three to six months [5] Company Summaries GE Aerospace - GE Aerospace is seeing strong demand for commercial engines and propulsion technologies, supported by rising defense budgets and geopolitical tensions [8] - The company raised its dividend by 28.6% to 36 cents per share in February 2025, with expected organic revenue growth in the low-double-digit range for 2025 [9] - GE Aerospace has an expected revenue growth rate of -6.8% and an earnings growth rate of 19.6% for the current year [9] Howmet Aerospace Inc. - Howmet Aerospace is benefiting from robust momentum in the commercial aerospace market and strength in its defense business due to rising defense budgets [10] - The company has a strong liquidity position and expects revenue and earnings growth rates of 8.5% and 28.6%, respectively, for the current year [11] Leidos Holdings Inc. - Leidos Holdings reported strong earnings and revenue growth, with increased contract wins from the Pentagon leading to a solid backlog of $46.30 billion [12][14] - The company is well-positioned to contribute to the development of a next-generation missile defense shield, with expected revenue and earnings growth rates of 2.7% and 4.3%, respectively, for the current year [14] Huntington Ingalls Industries Inc. - Huntington Ingalls is a leading U.S. shipbuilder with a solid order backlog, driven by strong demand for its nuclear-powered aircraft carriers and submarines [15][16] - The company expects revenue and earnings growth rates of 3.3% and 2.5%, respectively, for the current year [17] Vertical Aerospace Ltd. - Vertical Aerospace is focused on designing and manufacturing zero-emission electric vertical takeoff and landing (eVTOL) aircraft, with significant growth potential in the advanced air mobility market [18] - The company has an expected revenue growth rate of 1% and an earnings growth rate of over 100% for the current year [19]