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Huntington Ingalls Industries, Inc. (HII), headquartered in Newport News, Virginia, designs, builds, overhauls, and repairs military ships. Valued at $10.6 billion by market cap, the company offers non-nuclear and nuclear-powered vessels for the U.S. Navy and Coast Guard. Additionally, it provides aftermarket services for military ships worldwide.
Shares of this largest military shipbuilding company have underperformed the broader market over the past year. HII has declined 1.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 15.1%. However, in 2025, HII stock is up 43.8%, surpassing the SPX’s 9.9% rise on a YTD basis.
Narrowing the focus, HII’s underperformance is also apparent compared to SPDR S&P Aerospace & Defense ETF (XAR). The exchange-traded fund has gained about 44.2% over the past year. However, HII’s returns on a YTD basis outshine the ETF’s 32.9% gains over the same time frame.
HII’s underperformance stems from poor operating income across its business segments, notably the Virginia-class submarine program, aircraft carrier construction, and amphibious assault ships, which saw lower performance and reduced contract incentives. Higher interest expenses further contributed to the decline.
On Jul. 31, HII shares closed up by 7.9% after reporting its Q2 results. Its EPS of $3.86 exceeded Wall Street expectations of $3.23. The company’s revenue was $3.1 billion, exceeding Wall Street forecasts of $2.9 billion.
For the current fiscal year, ending in December, analysts expect HII’s EPS to grow 5.6% to $14.74 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimates in two of the last four quarters while missing the forecast on two other occasions.
Among the 12 analysts covering HII stock, the consensus is a “Moderate Buy.” That’s based on four “Strong Buy” ratings, seven “Holds,” and one “Moderate Sell.”
This configuration is less bullish than a month ago, with five analysts suggesting a “Strong Buy.”
On Aug. 13, Bank of America Corporation (BAC) kept an “Underperform” rating on HII and raised the price target to $260.
The mean price target of $284.73 represents a 4.8% premium to HII’s current price levels. The Street-high price target of $328 suggests an upside potential of 20.7%.
On the date of publication, Neha Panjwani 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.
