NEWPORT NEWS, Va., June 23, 2025 (GLOBE NEWSWIRE) -- HII's (NYSE: HII) Newport News Shipbuilding division moved another step closer toward delivery of Virginia-class submarine Massachusetts (SSN 798) when the first meal was recently served aboard the submarine. Massachusetts is currently pierside at NNS and is in the final stages of construction and testing. To celebrate the first meal, the crew welcomed the ship's sponsor, Sheryl Sandberg, founder, Lean In, and former chief operating officer of Meta (forme ...

Core Insights - The Zacks Focus List is a curated portfolio of 50 stocks aimed at long-term investors, expected to outperform the market over the next 12 months [3][5] - The Focus List has demonstrated strong past performance, gaining 13.85% in 2020 compared to the S&P 500's 9.38%, and a cumulative return of 2,519.23% since February 1, 1996, against the S&P's 854.95% [5] - The selection methodology relies on earnings estimate revisions, which are critical for predicting future stock performance [6][7] Focus List Methodology - Stocks are chosen based on the power of earnings estimate revisions, which are derived from brokerage analysts' assessments of companies [6] - The Zacks Rank, a proprietary stock-rating model, utilizes changes in quarterly earnings expectations to guide investment decisions [8] - The Zacks Rank is based on four factors: Agreement, Magnitude, Upside, and Surprise, classifying stocks into five groups from "Strong Buy" to "Strong Sell" [9] Focus List Spotlight: Huntington Ingalls Industries (HII) - Huntington Ingalls Industries, based in Newport News, VA, specializes in designing and building nuclear-powered and non-nuclear ships for the U.S. Navy and Coast Guard [11] - HII was added to the Focus List at $155.20 per share and has since increased by 50.82% to $234.08 [12] - Recent analyst revisions indicate a positive outlook, with nine analysts raising earnings estimates for fiscal 2025, and the Zacks Consensus Estimate increasing by $0.46 to $14.31 [12]

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]

Investment Rating - The report assigns a "Buy" rating on Huntington Ingalls Industries Inc. (HII) stock, with a 12-month price target of $265, indicating an upside potential of 16.3% from the current price of $227.84 [12]. Core Insights - The report highlights a substantial increase in support for U.S. Navy shipbuilding, driven by proposed defense reconciliation legislation that includes approximately $34 billion for defense shipbuilding efforts [2][8]. - HII is experiencing a strong demand for ships, with a backlog of $48 billion, and is focused on improving throughput by addressing labor and supply chain challenges [6][7]. - The company anticipates a path to improve margins over the medium term, aiming to return to shipbuilding margins of 9-10% as it transitions to more recent contracts [7]. Summary by Sections Management Meeting Takeaways - The management meeting included discussions on defense reconciliation legislation, Navy contract modifications, and HII's strategies for navigating labor and supply chain issues [1]. - The new administration's focus on enhancing U.S. shipbuilding capacity aligns with HII's re-baselined cost and completion expectations [1]. Defense Reconciliation - The proposed defense reconciliation includes $34 billion for shipbuilding, with various allocations for industrial base investment, procurement of vessels, and unmanned vessels [2][4]. - The actual disbursement of these funds may take several years, but there is optimism for a more rapid appropriation due to the current geopolitical landscape [2]. Labor and Supply Chain - Labor and supply chain constraints are the primary factors limiting HII's throughput, with ongoing efforts to hire experienced workers and improve retention through training and competitive wages [6][7]. - Recent contract modifications from the U.S. Navy, including an $18.5 billion contract for Virginia-class submarines, provide additional support for workforce development [6]. Margins and Free Cash Flow - HII is confident in its 2025 guidance, expecting to improve margins as it moves away from pre-COVID contracts that faced cost inflation [7]. - The company aims to achieve a shipbuilding margin of 9-10% in the future, supported by recent funding actions for workforce improvement [7]. Timeline of Major Shipbuilding Commentary - The report outlines significant actions taken by the Trump administration to enhance U.S. shipbuilding capabilities, including executive orders and proposed legislation aimed at increasing domestic shipbuilding activity [8].

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]