Shares in military shipbuilder Huntington Ingalls Industries were up sharply Monday, building on Friday's surge that came after the U.S. Navy announced it had selected the company to design and build ... ...

Core Viewpoint - Huntington Ingalls Industries (HII) has seen a significant increase in stock price, driven by strong trading volume and positive market sentiment following a key contract announcement with the U.S. Navy [1][2]. Group 1: Stock Performance - HII shares rose 4.3% in the last trading session, closing at $336.64, with a total gain of 6.9% over the past four weeks [1]. - The stock's recent performance is supported by solid trading volume, indicating heightened investor interest [1]. Group 2: Contract Announcement - On December 19, 2025, HII's Ingalls Shipbuilding unit was awarded a contract by the U.S. Navy to design and build a future small surface combatant ship, enhancing HII's naval shipbuilding portfolio [2]. - This contract is based on the established Legend-class national security cutter design, which is expected to provide steady workload visibility for Ingalls Shipbuilding operations [2]. Group 3: Company Position and Market Role - Huntington Ingalls is a major industrial employer in Virginia and is pivotal in U.S. naval shipbuilding, being the only company in the U.S. that designs and builds nuclear-powered aircraft carriers [3]. - More than 70% of the active U.S. Navy fleet consists of ships built by HII, underscoring its critical role in national defense [3]. Group 4: Earnings Expectations - HII is projected to report quarterly earnings of $3.75 per share, reflecting a year-over-year increase of 19.1%, with revenues expected to reach $3.05 billion, up 1.6% from the previous year [4]. - The consensus EPS estimate for HII has been revised slightly higher in the last 30 days, indicating a positive trend that may lead to further stock price appreciation [5]. Group 5: Industry Context - HII operates within the Zacks Aerospace - Defense industry, where it holds a Zacks Rank of 3 (Hold) [5]. - General Dynamics, a competitor in the same industry, has a consensus EPS estimate of $4.11, unchanged over the past month, and also holds a Zacks Rank of 3 (Hold) [6].

Core Insights - The One Big Beautiful Bill Act, signed into law on July 4, will significantly impact markets starting in January, particularly benefiting cyclical sectors outside of tech and AI [1][2] - Société Générale's chief US equity strategist, Manish Kabra, has identified 30 stocks that are expected to benefit from the tax and regulatory breaks provided by the bill, focusing on financials, industrials, and consumer cyclicals [2] Beneficiary Sectors - Key sectors poised for growth include defense, small-caps, consumer, and energy, as they are expected to receive a boost from the new tax and regulatory policies [2] - The average forward price-to-earnings ratio for the identified stocks is 17x, with an expected earnings-per-share growth of 15% in 2026 and 2027 [3] Defense Beneficiaries - General Dynamics Corp (GD): Positioned for defense modernization funding [6] - L3Harris Technologies Inc (LHX): Benefits from investment in advanced systems [6] - Northrop Grumman Corp (NOC): Well-placed for missile defense and space programs [6] - Huntington Ingalls Industries (HII): Supported by naval modernization initiatives [6] Capex Incentive Beneficiaries - United Rentals Inc (URI): Set to gain from increased construction activity [6] - Jacobs Solutions Inc (J): Benefits from infrastructure upgrades and industrial investment incentives [6] - Trimble Inc (TRMB): Aligned with manufacturing investment push [6] - Caterpillar Inc (CAT): Benefits from accelerated depreciation and domestic production incentives [6] - Cummins Inc (CMI): Supported by R&D expensing and industrial investment [6] - Deere & Co (DE): Gains from capex incentives and domestic manufacturing support [6] - Nucor Corp (NUE): Benefits from industrial base expansion and construction demand [6] - Freeport-McMoRan Inc (FCX): Critical supplier for electrification and infrastructure projects [6] - Duke Energy Corp (DUK): Positioned for grid modernization under capex policies [7]

Core Insights - HII's Ingalls Shipbuilding division has been awarded a contract by the U.S. Navy to design and build the future small surface combatant (SSC) ship, utilizing the design of the proven Legend-class national security cutter (NSC) [1] - The Ingalls team is currently engaged in building three classes of ships and modernizing Zumwalt-class destroyers, demonstrating their capacity and expertise in shipbuilding [2] - HII has invested over $1 billion in infrastructure and partnerships to enhance shipbuilding capabilities and explore the addition of a new shipyard in the U.S. [3] Company Overview - HII is recognized as the largest military shipbuilder in the U.S., with a history of over 135 years in advancing national security [5] - The company employs a workforce of 44,000 and provides a range of capabilities from ships to unmanned systems and advanced technologies [5] - HII's mission focuses on delivering powerful ships and solutions to support national defense and global peace [4]

Core Points - HII's Newport News Shipbuilding division has achieved a significant milestone with the Virginia-class submarine Oklahoma (SSN 802) reaching "pressure hull complete" status, indicating that all hull sections are now a single, watertight unit [1][2] - Oklahoma is the 29th Virginia-class fast attack submarine, the first of Block V, and the 14th to be delivered by Newport News Shipbuilding [2] Company Overview - HII is a global defense provider focused on delivering advanced naval capabilities, including nuclear-powered submarines, which enhance firepower, maneuverability, and stealth for the U.S. Navy [6][7] - As the largest military shipbuilder in the U.S., HII has a history of over 135 years in advancing national security and employs a workforce of 44,000 [8]

Huntington Ingalls Industries, Inc. (HII) is a leading U.S. military shipbuilding company and a prominent provider of professional services to government and industry clients. Headquartered in Newport News, Virginia, HII was formed in March 2011 following the spin-off of Northrop Grumman’s (NOC) shipbuilding operations. Its operations span three main divisions, Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies, encompassing design, construction, overhaul, maintenance, and services a ...

Market Overview - The U.S. stock markets ended the week mostly lower, with the Nasdaq Composite and S&P 500 slipping by 1.49% and 0.28% respectively due to a sharp selloff in tech stocks [1] - The Dow Jones Industrial Average gained 1.51% as investors rotated toward value and traditional sectors [1] Federal Reserve Actions - The Federal Reserve cut its key overnight borrowing rate by a quarter-percentage-point, now in the range of 3.5% to 3.75% [2] - This decision was influenced by signs of gradually cooling inflation, aimed at supporting the labor market and stimulating economic growth [2] - The number of Americans filing new applications for unemployment benefits surged to a 4.5-year high of 236,000, indicating a sharp deterioration in the jobs market [2] Stock Performance and Recommendations - Liquidia Corporation (LQDA) shares gained 43.9% since being upgraded to Zacks Rank 2 (Buy) on October 13, outperforming the S&P 500's 4.4% increase [3][6] - The Bank of N.T. Butterfield & Son Limited (NTB) returned 22.7% since its upgrade to Zacks Rank 1 (Strong Buy) on October 7, compared to the S&P 500's 1.5% increase [4] - Western Digital Corporation (WDC) shares advanced 52.8% since its upgrade to Outperform on October 13, significantly beating the S&P 500's 4.4% increase [7] Portfolio Performance - A hypothetical portfolio of Zacks Rank 1 stocks returned +14.3% in 2025, slightly underperforming the S&P 500 index's +14.9% [11] - The Zacks Model Portfolio has outperformed the S&P index by more than 12 percentage points since 1988, with an annualized average return of +23.9% compared to +11.5% for the S&P 500 index [14] Sector-Specific Stocks - Cencora, Inc. (COR) and Fair Isaac Corporation (FICO) returned 18.7% and 18.6% respectively over the past 12 weeks [15] - Johnson & Johnson (JNJ) returned 19.3% over the past 12 weeks, benefiting from investor demand for quality dividend stocks [19]

Core Insights - HII hosted an Australian delegation led by Deputy Prime Minister Richard Marles to strengthen the AUKUS partnership focused on nuclear-powered submarines and advanced capabilities [1][2][3] Group 1: AUKUS Partnership - The visit supports the trilateral AUKUS partnership, which aims to provide Australia with conventionally armed, nuclear-powered submarines [2] - HII is committed to the AUKUS mission, emphasizing industrial integration among the U.S., U.K., and Australia for aligned defense production and workforce development [6][7] Group 2: Delegation Activities - The Australian delegation toured Newport News Shipbuilding, witnessing the keel laying ceremony for the Virginia-class submarine Barb (SSN 804) [3] - Delegates engaged with HII leadership and learned about the construction of Virginia-class submarines and workforce development initiatives [3][6] Group 3: Workforce Development and Supplier Qualification - HII is a founding member of the AUKUS Workforce Alliance, aimed at preparing a skilled workforce for Australia's nuclear submarine program [7] - The company has been awarded a contract for the Australian Submarine Supplier Qualification (AUSSQ) pilot program to expedite the qualification of Australian suppliers for the U.S. submarine industrial base [7]

Core Insights - HII has announced that the construction of the ROMULUS unmanned surface vessel (USV) prototype has reached 30% completion and is on track for sea trials in Q4 2026 [1][3][10] Company Developments - HII executives visited Breaux Brothers Enterprises to review the progress of the ROMULUS prototype, focusing on hull construction and integration of the Odyssey Autonomous Control System (ACS) [2][3] - The ROMULUS USVs are designed to meet the needs of the U.S. Navy, Marine Corps, and allied forces, emphasizing high endurance and operational advantages [3][4] Technical Specifications - The ROMULUS USVs are engineered for rapid production, capable of speeds over 25 knots and a range of 2,500 nautical miles, allowing for mission flexibility [7] - The Odyssey ACS, utilized in over 35 USV platforms and 750 REMUS UUVs globally, enables sustained autonomy and modular payload integration [8][9] Strategic Partnerships - HII is collaborating with Shield AI, Applied Intuition, and C3 AI to enhance the autonomous capabilities of the ROMULUS platforms [8] - The successful completion of the first major test of the integrated autonomy solution aboard the ROMULUS 20 USV marks a significant step towards operational deployment [10]

Core Insights - Huntington Ingalls Industries (HII) has signed a contract with Babcock International Group to enhance Virginia-class submarine construction throughput at HII's Newport News Shipbuilding division [1][9] - The contract allows Babcock to manufacture complex submarine assemblies at its Rosyth facility in Scotland for Virginia-class Block VI submarines, marking the first time Babcock will support NNS-specific submarine work [2][9] Partnership Benefits - The expanded partnership with Babcock is expected to increase production throughput, reduce workload strain at Newport News, and enhance the resilience of HII's submarine supply chain [3][4] - Leveraging Babcock's expertise will reinforce HII's supplier base and strengthen submarine production in the U.S., positioning HII for future U.S.-U.K. submarine collaborations, including potential AUKUS-related opportunities [4] Market Growth Potential - The submarine market is projected to grow at a compound annual growth rate of 4.17% from 2025 to 2030, indicating substantial growth prospects for HII in the military submarine sector [5] - Other defense players like General Dynamics, BAE Systems, and Northrop Grumman are also positioned to benefit from the expanding submarine market [6][8] Financial Performance - General Dynamics has a long-term earnings growth rate of 12.81%, with 2025 sales estimated at $51.97 billion, reflecting an 8.9% increase [7] - BAE Systems has a long-term earnings growth rate of 14.57%, with 2025 sales projected at $40.68 billion, suggesting a significant increase of 62.9% [9] - Northrop Grumman has a long-term earnings growth rate of 4.16%, with 2025 sales estimated at $41.89 billion, indicating a 2.1% rise [10] Stock Performance - HII shares have increased by 39.3% over the past six months, significantly outperforming the industry average growth of 6% [11]