TD Cowen has revised its outlook on Huntington Ingalls Industries (HII, Financial), elevating the stock to a Buy rating from its previous Hold stance. The financial services firm has also boosted the price target for HII to $300, a significant increase from the prior target of $250.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Huntington Ingalls Industries Inc (HII, Financial) is $249.24 with a high estimate of $310.12 and a low estimate of $180.00. The average target implies an upside of 0.13% from the current price of $248.92. More detailed estimate data can be found on the Huntington Ingalls Industries Inc (HII) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, Huntington Ingalls Industries Inc's (HII, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Huntington Ingalls Industries Inc (HII, Financial) in one year is $265.63, suggesting a upside of 6.71% from the current price of $248.92. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Huntington Ingalls Industries Inc (HII) Summary page.
HII Key Business Developments
Release Date: May 01, 2025
- Revenue: $2.7 billion for the first quarter, a decrease of 2.5% compared to the same period last year.
- Earnings Per Share (EPS): $3.79 for the first quarter.
- Backlog: $48 billion at the end of the first quarter, with approximately $28 billion currently funded.
- Segment Operating Income: $171 million, an increase of less than 1% compared to the first quarter of 2024.
- Operating Margin: 5.9% for the first quarter, compared to 5.5% in the same period last year.
- Net Earnings: $149 million, compared to $153 million in the first quarter of 2024.
- Free Cash Flow: Negative $462 million for the first quarter.
- Cash Used in Operations: $395 million for the first quarter.
- Net Capital Expenditures: $67 million, or 2.5% of revenues.
- Cash Dividend: $1.35 per share, totaling $53 million in aggregate.
- Liquidity: Approximately $1.5 billion at the end of the first quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Huntington Ingalls Industries Inc (HII, Financial) reported a first-quarter revenue of $2.7 billion and earnings per share of $3.79, with a backlog of $48 billion, of which $28 billion is funded.
- The company is making progress on its operational initiatives, including a 20% year-over-year improvement in shipbuilding throughput, particularly at Ingalls Shipbuilding.
- HII has secured a Block V FY24 two-boat contract and is focusing on future contracts, such as Block VI and Columbia Build II, aligning with defense priorities.
- The company is actively involved in strategic partnerships, including an MOU with HD Hyundai Heavy Industries, to explore opportunities in ship production.
- HII's Mission Technologies Division achieved significant milestones, including delivering Lionfish small uncrewed undersea vehicles to the US Navy and developing a high-energy laser counter-drone system for the US Army.
Negative Points
- Newport News Shipbuilding is modestly behind plan due to atypical weather and delays in receiving major equipment for CVN 80, impacting construction progress.
- First-quarter revenues decreased by 2.5% compared to the same period last year, with declines at Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies.
- Free cash flow in the quarter was negative $462 million, at the low end of the guidance range, due to timing of incentives and normal fluctuations in program receipts and disbursements.
- Shipbuilding margins are expected to be near the low end of the annual guidance range in the second quarter, reflecting conservative guidance and ongoing risks.
- The company faces challenges in increasing workforce retention and productivity, with ongoing labor negotiations and the need for targeted wage support.
