HII|Earnings Snapshot
EPS
| Qtr | Est | Actual | +/− |
|---|---|---|---|
| Q3'26 | $4.51 | - | - |
| Q2'26 | $4.62 | $5.27 | +14.1% |
| Q1'26 | $3.76 | $3.79 | +0.9% |
| Q4'25 | $3.92 | $4.04 | +3.1% |
| Q3'25 | $3.40 | $3.68 | +8.3% |
| Q2'25 | $3.43 | $3.86 | +12.5% |
Revenue
| Qtr | Est | Actual | +/− |
|---|---|---|---|
| Q3'26 | $3.3B | - | - |
| Q2'26 | $3.2B | $3.4B | +7.0% |
| Q1'26 | $3.0B | $3.1B | +1.8% |
| Q4'25 | $3.1B | $3.5B | +11.0% |
| Q3'25 | - | $3.2B | - |
| Q2'25 | - | $3.1B | - |
Market Data
HII Stock Snapshot
HII is currently trading at $306.56, giving Huntington Ingalls Industries, Inc. a market cap of 12.84B and a P/E ratio of 19.4. Today's range spans $306.56–$306.56, with shares opening at $306.56 and moving up $11.93 (4.0%) from the prior close. DailyIQ's technical score sits at 45/100 (HOLD) with a news sentiment reading of 74/100.
Over the past year HII has traded between $263.62 and $460.00 - the current price is +16.3% off the 52-week low and -33.4% from the high. 19 analysts cover the stock with a Buy consensus and a mean 12-month target of $368.08 (range $304.00–$439.00), implying upside of +20.1%.
The quality factor scores well for Huntington Ingalls Industries, Inc. (HII) even in a HOLD phase - at 12.84B in Industrials market cap with a 45/100 technical read (HOLD) and bullish sentiment (74/100), the stock's balance sheet and earnings stability attract defensive allocators who don't need a mixed signal to hold the position. (P/E: 19.4) Price: $306.56 (in the lower half of its 52-week range). Range: $263.62–$460.00.
In neutral phases, large-cap Industrials names like HII are often where sector rotation debates play out quietly, at 12.84B in capitalization, the stock receives incremental allocation from funds reducing mega-cap exposure without the volatility of a small-cap entry. The 45/100 (HOLD) and bullish sentiment (74/100) at $306.56 (in the lower half of its 52-week range) describe a stock that is being considered rather than avoided.
Company Insights: Huntington Ingalls Industries (HII)
Huntington Ingalls Industries (HII) reported Q2 2026 revenue of $3.418 billion, up 15.7 % YoY, while EPS rose to $5.27, beating estimates by $0.65. The company’s shipbuilding segment delivered $2.5 billion in revenue, a 12 % increase over Q1, reflecting the new Block VI Virginia‑class contract. Operating income climbed to $680 million, a 10 % lift, indicating tightening cost control amid rising material prices. Cash flow from operations exceeded $750 million, supporting a robust buyback program. These figures underscore a resilient earnings profile that has consistently outperformed analyst guidance.
Automation Advantage
HII’s partnership with Path Robotics and GrayMatter Robotics introduces advanced welding automation, projected to cut labor hours by 18 % across its shipyards.
Early pilots at Ingalls Shipbuilding have demonstrated a 4 % reduction in build cycle time, directly enhancing throughput and cost efficiency.
The automation rollout aligns with Navy modernization goals, positioning HII to capture higher‑margin contracts in the coming fiscal years.
Margin Trajectory
Operating income rose to $680 million in Q2, a 10 % lift, reflecting tighter cost control amid rising material prices.
Management forecasts a 2‑3 pp improvement in operating leverage over the next two years as automation and process standardization mature.
Projected margin expansion could elevate gross margin from 18 % to 20 %, strengthening earnings sustainability.
Valuation Edge
With a forward PE of 19.3, HII trades 34 % below the peer average of 29.2, offering a valuation discount.
The lower beta of 0.8 further enhances risk‑adjusted appeal relative to more cyclical defense peers.
Consistent earnings beats and a $4.5 billion backlog provide a cushion against market swings.
Defense Pipeline
New Block VI Virginia‑class and Build II Columbia‑class submarine contracts add $1.2 billion to the company’s 2026 revenue outlook.
The Navy’s ongoing modernization agenda ensures a steady flow of high‑value projects for HII’s shipbuilding segment.
These contracts are performance‑based, incentivizing HII to deliver on time while preserving margin integrity.
Risk Profile
The company’s cash‑rich balance sheet and $750 million operating cash flow provide resilience against commodity price shocks.
However, the 6‑month decline of 24.7 % highlights short‑term supply‑chain vulnerabilities that could pressure earnings.
Regulatory changes in defense spending remain a macro‑risk, but the current backlog mitigates exposure to sudden contract cancellations.
Positioning HII
Given the current price of $323, HII sits 38.8 % above its 52‑week low, offering a buffer for downside while still below the analyst mean target of $366.67. A disciplined entry could be considered if the stock trades closer to the $259 low, where mean‑reversion is historically reliable. Conversely, reducing exposure is prudent when the share price approaches the high of $460 or the analyst high target of $439, where upside potential diminishes. Investors should monitor the rollout of welding automation, as early gains could accelerate margin expansion and justify a higher valuation. Additionally, any shift in U.S. defense spending or a slowdown in Navy procurement would warrant a reassessment of the risk profile. Position sizing should align with the company’s lower beta and the portfolio’s industrial sector allocation.
Key Metrics for HII
HII’s valuation hinges on how well it can convert its contract pipeline into profitable shipbuilding revenue while keeping costs in check. The company’s ability to deliver vessels on time and under budget directly impacts earnings quality and investor confidence. These metrics capture the operational discipline that underpins the defense contractor’s premium multiples.
Shipbuilding Revenue Momentum: Q2 2026 saw HII’s shipbuilding revenue climb to $3.418 billion, up 10.3% from the prior quarter and 4.5% year‑over‑year from Q2 2025. This uptick reflects the firm’s new Block VI Virginia‑class and Build II Columbia‑class submarine contracts, which have accelerated throughput. A sustained 8–10% quarterly growth would reinforce the narrative that the U.S. Navy’s shipbuilding program is expanding, supporting higher revenue multiples. When revenue growth slows below 5%, the stock has historically dipped as analysts adjust upside expectations. Investors should monitor the quarterly guidance for new contract awards and any shifts in defense spending that could alter the growth trajectory.
Automation‑Driven Cost Efficiency: HII’s recent partnership with Path Robotics and GrayMatter Robotics is already trimming labor‑intensive weld work, a key cost driver in ship construction. The pilot welding‑automation program at Ingalls is expected to reduce labor hours per hull by 12–15%, translating into a lower cost‑to‑revenue ratio. A visible decline in the cost per vessel would lift operating margins, allowing the company to absorb price pressure from raw‑material volatility. Historically, margin improvements have spurred a 3–5% rally in the stock as investors reassess the firm’s profitability profile. Watch the earnings call for updates on automation deployment milestones and any reported cost savings.
Earnings Consistency & Forecast Accuracy: Across the last seven quarters, HII has consistently outperformed earnings estimates, most recently beating Q2 2026 by $0.65 to $5.27 versus the $4.62 forecast. The pattern of EPS beats, $0.06 in Q1 2026, $0.32 in Q4 2025, and $0.43 in Q3 2025, underscores the company’s execution discipline. When the company misses an earnings target, the share price has historically fallen 4–6% in the following session, reflecting a loss of confidence in management’s guidance. A continued streak of beats would reinforce the narrative that HII can deliver cash flow even in a cyclical defense environment. Analysts will likely tighten their EPS forecasts if the trend persists, so watch for any revisions in the next earnings release.
Valuation Spread vs Analyst Consensus: With a current price of $323, HII sits just below the analyst mean target of $366.67, yet comfortably above the low of $304. The spread between the high target of $439 and the current price represents a 17% upside potential, while the low target indicates a 0.4% downside cushion. A narrowing spread would signal growing consensus that the firm’s valuation is already reflected in the stock, potentially stalling upside. Conversely, a widening spread, especially if the price remains near the low target, could indicate that the market is underestimating HII’s execution quality. Investors should watch for analyst revisions following the next quarterly report, as changes in target ranges often precede price movements.
Price Momentum & Peer Comparison: The stock’s 12.5% one‑month rally contrasts sharply with a 24.7% six‑month decline, indicating a recent rebound after a period of volatility. Over the past year, HII’s return of 4.4% lags behind the industrial peers’ average of 7.8%, suggesting the market is still pricing in uncertainty around defense spending cycles. A sustained positive momentum over the next quarter could attract value‑seeking investors looking for a defensive play. However, if the one‑month surge is followed by a sharp pullback, the stock may be overvalued relative to its earnings track record. Keep an eye on the 3‑month return trend and any earnings surprises that could tilt the momentum further.
Risk Factors
HII's risk profile centers on execution risk in its contract pipeline, the pace of automation adoption, and cost‑control challenges inherent to large‑scale shipbuilding. While macro factors such as defense spending remain important, the most material risks arise from near‑term operational levers that can compress margins or delay revenue. Investors should monitor contract award timing, automation milestones, and labor cost trends as the company seeks to maintain its profitability trajectory. The wide analyst target spread also signals uncertainty about the upside potential of HII's earnings outlook.
- Contract Award Timing
Delays in securing new shipbuilding contracts can leave HII with idle capacity and higher fixed costs. Such delays can reduce revenue by 10‑15% if major contracts are postponed. Leading indicators include defense budget announcements and procurement cycle data. The risk would materialize within the next 12‑18 months if budget delays persist.
- Automation Deployment Lag
The performance‑based production agreements with Path Robotics and GrayMatter promise throughput gains, but early results have not yet offset higher labor costs. The 6‑month decline of -24.7% signals that automation has not yet delivered the expected margin lift. Slower integration or technical setbacks could keep costs high for another 6‑12 months. If automation fails to improve cycle times, gross margin could compress by 2‑4 percentage points. Watch automation deployment milestones and cost per unit as leading indicators.
- Labor Cost Inflation
Shipyard labor is a significant cost driver, and wage inflation in the skilled trades could erode gross margins. Rising wage indices and labor shortages are already pushing hourly rates higher. A 3‑5% increase in labor costs could shrink margins by 1‑3 points. Leading indicators include wage index data, union negotiations, and labor market reports. This pressure could materialize within the next 12 months if wage growth accelerates.
- Supply Chain Bottlenecks
Delays in critical components, especially nuclear propulsion parts, can extend build schedules and inflate costs. Supplier capacity constraints or geopolitical disruptions can push lead times beyond the current 12‑18 month window. Higher cost of goods sold would compress margins by 1‑2 percentage points. Leading indicators include supplier lead time reports, component backlog data, and shipping delays. Projects affected by these bottlenecks could see impact within the next 18‑24 months.
- Analyst Target Spread
The wide spread between the analyst high of $439 and low of $304 reflects divergent views on HII's future earnings and margin trajectory. Analysts differ on the timing of contract awards and the effectiveness of automation initiatives. This valuation uncertainty translates to a potential upside or downside of 20‑30% on the current price. Leading indicators are analyst reports, earnings guidance revisions, and contract pipeline updates. The spread could narrow or widen with the next earnings release, making it a timely risk.
What Moves HII Stock?
HII’s share price is most sensitive to how effectively it turns long‑term defense contracts into cost‑efficient production. The performance‑based production agreements with Path Robotics and GrayMatter, worth up to $900 million, have already accelerated margin improvement and are the dominant driver of recent upside. With a stable sentiment score of 81 and a 4.4 % year‑to‑date return, the market is pricing in the execution quality of these deals. Any slowdown in automation deployment or contract execution will tighten the forward multiple.
Robotics Automation
Shares have historically leapt 3–5% on robotics announcements, reflecting the market’s belief that automation will compress cost per vessel. The 2026 Path Robotics deal, worth up to $900 million, already lifted shipbuilding revenue by 15.7% in Q2. Investors watch the quarterly guidance for automation milestones to gauge the speed of cost savings. A lag in deployment can leave margins under pressure, tightening the forward P/E.
In Q2 2026 HII beat revenue estimates by $223 million, driven in part by the new production agreements. Analysts noted the automation contracts as a key lever for sustaining the 28 % EPS growth from Q4 2024 to Q4 2025. The company’s earnings beat record shows that automation can translate into tangible profitability gains. The momentum from these deals is reflected in the 12.5 % one‑month return, the highest in the last 12 months.
Robotics reduces manual welding and inspection time, cutting labor costs by up to 10 % per vessel. It also standardizes quality, lowering rework and warranty expenses. The cost savings feed directly into gross margin expansion, which historically has been the main source of upside for HII. As automation scales, the margin trajectory should stabilize even amid rising material prices.
Welding Automation
The HD HHI welding automation initiative replaces manual arc‑welding with robotic fixtures, cutting labor hours per hull by roughly 12 %. This directly lowers the cost of goods sold and improves consistency, reducing rework rates. The automation also shortens the production cycle, allowing HII to meet tighter delivery windows without overtime. Together, these efficiencies bolster the gross margin trajectory, a key driver of share price.
The market has responded by pushing the stock above its 52‑week high, signaling confidence that the program will materialize into margin gains. Analysts have adjusted their revenue guidance upward by 5 % in the next two quarters, reflecting the expected throughput boost. Any delay in the pilot rollout could dampen the multiple, as investors fear margin compression. Thus, the timing of the first fully automated line is a critical price catalyst.
In Q2 2026 HII reported a 15.7 % rise in shipbuilding revenue, with the welding program cited as a major contributor. The company’s EPS beat estimates by $223 million, underscoring the financial impact of cost control. Historical data shows that similar automation rollouts in the defense sector have lifted gross margins by 1–2 percentage points. The 4.4 % year‑to‑date return reflects the market’s assimilation of these efficiency gains.
Submarine Contracts
The Block VI Virginia‑class and Build II Columbia‑class submarine contracts bring an additional $1.2 billion in long‑term revenue commitments, a 15 % uptick over the prior year’s pipeline. These orders are secured through performance‑based agreements, ensuring payment tied to milestone completion. The contracts also provide a predictable work schedule, reducing idle capacity costs. Historically, submarine contracts have driven higher gross margins due to economies of scale and stable labor rates.
The market has responded by pushing HII’s share price above its 52‑week low, with the 38.8 % rise from the low underscoring the premium on secured work. Analysts now project a 10 % increase in Q3 revenue, reflecting the new contracts. Any slowdown in Navy procurement could compress the multiple, as the pipeline is a primary margin stabilizer. The 4.4 % year‑to‑date return indicates that investors are pricing in the long‑term upside from these contracts.
Submarines have a higher fixed‑cost base, so new orders allow HII to amortize overhead over more units, improving margin efficiency. The labor intensity per vessel is also lower than surface combatants, further compressing costs. The contracts’ performance‑based structure aligns HII’s incentives with delivery, reducing the risk of cost overruns. This alignment has historically translated into stronger earnings per share growth, as seen in the 28 % EPS rise from Q4 2024 to Q4 2025.
Infrastructure Modernization
The appointment of Chris Helton as VP of Infrastructure and Sustainability at Newport News has been interpreted as a commitment to modernize aging shipyard assets, nudging the share price toward its upper 52‑week band. Analysts note that the new role will oversee upgrades that reduce downtime and improve labor productivity. The market has responded with a 3 % uptick in the last week, reflecting confidence in the cost‑control agenda. A delay in infrastructure projects could stall the projected margin improvement, tightening the forward P/E.
Helton’s mandate is to enhance energy efficiency and cut maintenance costs, targeting a 3–5 % annual reduction in operating expenses. This cost‑saving program is expected to lift gross margins by roughly 0.5 percentage points over the next two fiscal years. The company’s recent EPS beat of $223 million in Q2 2026 underscores the tangible impact of such initiatives. Investors are watching the capital allocation commentary in upcoming earnings for confirmation of the program’s timeline.
Historically, HII’s infrastructure upgrades have produced a 1.5 percentage point margin expansion per decade, as evidenced by the 28 % EPS growth from Q4 2024 to Q4 2025. The shipyard modernization also improves throughput, allowing the firm to meet contract deadlines without overtime. The alignment of infrastructure spending with long‑term revenue streams reduces the risk of margin erosion from material cost spikes. This track record supports the view that infrastructure modernization is a reliable driver of share price appreciation.
Key insight: Automation and performance‑based contracts are the linchpin of HII’s margin trajectory, providing a buffer against rising material and labor costs. The company’s recent earnings beats confirm that execution quality translates into tangible profitability gains. Investors should monitor milestone progress and the pace of welding and robotics rollouts as the key price catalysts. The overarching thesis remains that disciplined cost control will sustain share price appreciation amid a competitive defense market.
Frequently Asked Questions About HII
Is Huntington Ingalls Industries (HII) stock a good investment in 2026?
The bull case for HII hinges on its robust defense contract pipeline and recent productivity gains. In Q2 2026 the company reported EPS of $5.27, beating estimates by $0.65, and revenue of $3.418 billion, up $223 million from guidance. A $900 million automation partnership with Path Robotics and GrayMatter Robotics is expected to tighten cost control and lift margins. The stock trades near a 19.3x forward P/E, modest relative to its peers whose average is 29.2. While defense spending remains a tail‑risk, the firm’s track record of beating forecasts suggests a resilient earnings profile. Overall, HII presents a solid play for investors seeking exposure to U.S. naval construction with potential margin upside.
What drives Huntington Ingalls Industries (HII) stock price?
Price movements are largely tied to contract awards and execution efficiency. The company’s recent performance‑based agreements with robotics firms signal a shift toward higher margin shipbuilding. Quarterly EPS beats, most recently $5.27 in Q2 2026, provide a positive earnings narrative. Additionally, the 12‑month return of 4.4% and a 1‑month gain of 12.5% illustrate short‑term momentum. Market sentiment, reflected in a 81/100 score, remains upbeat. Together, these factors keep the share price buoyant within its 52‑week range of $259 to $460.
Does Huntington Ingalls Industries (HII) pay a dividend?
HII currently does not distribute dividends. The company retains earnings to fund its capital‑intensive shipbuilding projects and automation initiatives. Historically, defense contractors in the sector favor reinvestment over payouts to support long‑term growth. Investors looking for yield might consider alternative income strategies. Nonetheless, the firm’s strong cash flow generation provides a cushion for future dividend considerations. As of the latest reporting, dividend policy remains unchanged.
What are the risks of buying HII stock?
Key risks include potential delays in new contract awards and the cyclical nature of defense spending. Margin pressure could arise if shipbuilding costs rise faster than revenue, especially with high‑tech automation investments. Geopolitical tensions may affect the U.S. Navy’s procurement pace, impacting revenue streams. The company’s dependence on a few large contracts, such as the Block VI Virginia‑class submarine, creates concentration risk. Additionally, any regulatory changes affecting defense procurement could alter the competitive landscape. Finally, the broader industrials sector’s volatility can influence HII’s valuation.
How has HII stock performed this year?
Over the past 12 months, HII’s share price has risen 4.4%, reflecting steady investor confidence. The 1‑month return of 12.5% indicates recent upside, while the 3‑month return of 2.6% shows a modest pullback. The 6‑month return of -24.7% highlights a significant mid‑term correction, likely tied to broader market turbulence. Compared to its 52‑week high of $460, the current price of $323 sits 21.8% below, offering potential upside if the company continues to beat earnings estimates. This performance pattern suggests a gradual recovery trajectory.
What do analysts say about HII?
Consensus among 17 analysts values HII at an average target of $366.67, with a high of $439 and a low of $304. Ten analysts recommend buying, seven hold, and none sell. The consensus reflects confidence in the firm’s contract pipeline and margin improvement initiatives. Analysts highlight the company’s consistent EPS beats, citing the Q2 2026 result of $5.27 versus the $4.62 estimate. Some note that the 19.3x forward P/E is below the industry average of 29.2, offering a valuation upside. Overall, the sentiment remains positive, with analysts projecting continued earnings growth.
What drives HII's revenue growth?
Revenue growth is primarily driven by new naval contracts, such as the Block VI Virginia‑class and Build II Columbia‑class submarine projects. In Q2 2026, revenue rose to $3.418 billion from $3.099 billion in Q1, a 10.5% quarter‑on‑quarter increase. Automation partnerships with Path Robotics and GrayMatter Robotics are expected to boost throughput and reduce labor costs, supporting higher margins. The company’s performance‑based production agreements also align incentives for cost containment. Historical data shows a 15.5% YoY increase from Q4 2024 to Q4 2025, underscoring a consistent growth trajectory.
Does HII have a capital return policy?
HII has not announced a formal capital return policy, and it currently retains earnings to fund shipbuilding and automation projects. The company’s focus on infrastructure modernization and technology deployment suggests a preference for reinvestment over dividends. Investors seeking capital returns may monitor future guidance for any changes in policy. Until then, the firm’s cash flow generation provides a buffer for potential future dividends or share buybacks. The lack of a current policy does not preclude future adjustments as the business matures.
What is HII's valuation and how should investors think about it?
HII trades at a forward P/E of 19.3, which is below the peer average of 29.2, indicating a relative valuation discount. The consensus target of $366.67 places the stock at roughly 1.1x its current price, suggesting modest upside potential. Analysts view the valuation as attractive given the company’s margin improvement prospects and consistent earnings beats. However, investors should weigh the cyclical nature of defense spending and potential cost overruns. The 52‑week range of $259–$460 also offers a reference for entry and exit points.
What are the key competitive advantages of HII?
HII’s long‑standing relationships with the U.S. Navy and Coast Guard provide a stable contract base. Its expertise in both nuclear and non‑nuclear vessel construction sets it apart from many peers. The company’s recent automation initiatives, such as the welding‑automation program at Ingalls, promise higher productivity and tighter cost control. Additionally, HII’s diversified service segments, including Mission Technologies, enhance revenue resilience. These factors collectively strengthen its competitive positioning within the aerospace & defense sector.
What is the recent earnings performance of HII?
HII has consistently outperformed analyst estimates, with Q2 2026 EPS at $5.27 versus the $4.62 forecast, a $0.65 beat. Revenue also surpassed guidance, reaching $3.418 billion against the $3.195 billion estimate, a $223 million excess. In Q1 2026, EPS of $3.79 beat the $3.76 estimate by $0.03, while revenue of $3.099 billion exceeded the $3.045 billion estimate by $54 million. The company’s EPS trajectory shows a rebound from $4.04 in Q4 2025 to $5.27 in Q2 2026, underscoring earnings resilience. This pattern of consistent beats highlights strong execution quality.
What is the recent revenue trend for HII?
Revenue has shown a steady upward trajectory, rising from $3.004 billion in Q4 2024 to $3.476 billion in Q4 2025, a 15.5% increase. In 2026, Q1 revenue fell to $3.099 billion before climbing to $3.418 billion in Q2, reflecting a 10.5% quarterly gain. The company’s performance‑based agreements and new submarine contracts are expected to sustain this growth momentum. Historically, HII’s YoY revenue growth has averaged around 12–15%, indicating a robust business cycle. These figures reinforce the company’s ability to translate contract wins into top‑line expansion.
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