HII
Huntington Ingalls Industries, Inc.$453.73
Sell
Target $335.45
Report: Mar 07, 2026Industrials • Aerospace & Defense • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$453.73-26.1%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$335.45
(26% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$460.00
52 Week Low$177.42
Avg. 3 Month Volume571K
Efficiency
LTM Gross Margin12.7%
LTM EBITDA Margin9.7%
LTM EBIT Margin7.1%
LTM Operating Margin5.3%
LTM ROA4.9%
LTM ROE12.3%
LTM ROIC10.1%
LTM ROCE9.4%
Capital Structure
Market Cap (MM)$14.9B
Enterprise Value (MM)$17.1B
Shares Outstanding39.30M
Total Debt (MM)$2.92B
Cash & Equivalents (MM)$774.00M
LTM Net Debt (MM)$2.15B
LTM Net Debt/EBITDA1.8x
Growth
TTM Rev. Growth8.2%
Last 3-Yr Rev. CAGR5.4%
Last 3-Yr EBITDA CAGR0.9%
Last 3-Yr EPS CAGR2.1%
Valuation
Street Target Price$368.00
LTM EV/Revenue1.4x
LTM EV/Gross Profit10.8x
LTM EV/EBIT19.3x
LTM EV/EBITDA14.1x
LTM P/E24.6x
LTM EV/FCF21.3x
LTM P/FCF18.6x
LTM P/TB1.6x
LTM P/B2.9x
Dividend Yield1.4%
Payout Ratio35.3%
Executive SummarySituation: Current price is $453.73 versus fair value $335.45 (-26.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Resolution of the federal weld probe and disclosure of remediation costs. Bear case centers on Permanent impairment of the shipbuilding moat due to labor scarcity. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
A massive 57 billion dollar backlog provides multi-year revenue visibility, and the Mission Technologies segment is growing at double digits with lower capital intensity.
Bear Case
Operating margins have collapsed to 5.3% due to labor scarcity and fixed-price contract risks, and ROIC of 6.9% is now value-destructive relative to the 9.5% WACC.
Key Catalysts
Near-Term (0-6 months)Impact: Critical
Resolution of the federal weld probe and disclosure of remediation costs. This will likely validate our bear case by quantifying the financi...
Mid-Term (6-18 months)Impact: High
Failure to meet the 15% shipbuilding throughput target for 2026. Missing this target would prove that the outsourcing and distributed shipbu...
Long-Term (18+ months)Impact: Moderate
Huntington Ingalls is at a critical juncture as it navigates a federal investigation and a structural margin decline, making it highly relev...
Primary Risks
Concern: High
Permanent impairment of the shipbuilding moat due to labor scarcity. The inability to recruit and retain skilled nuclear-certified tradespeo...
Concern: High
Fixed-price contract exposure in an inflationary environment. Rising labor and material costs exceed the escalation clauses in long-cycle co...
Concern: Medium
The stewardship verdict is poor. The ongoing federal investigation into noncompliant welds on 26 ships represents a catastrophic failure of...
Recent Activity
2026-02-05SEC Filing (SC 13G/A)
-10.59%Beneficial ownership update (SC 13G/A).
2025-10-30SEC Filing (8-K)
+6.92%Excerpt: (EX-99.1) Document Exhibit 99.1 News Release Contacts: Brooke Hart (Media) brooke.hart@hii-co.com 202-264-7108 Christie Thomas (Investors) christie.thomas@hii-co.com 757-380-2104 HII Reports Third Quarter 2025 Results NEWPORT...
2025-07-31SEC Filing (8-K)
+7.87%Excerpt: (EX-99.1) Document Exhibit 99.1 News Release Contacts: Brooke Hart (Media) brooke.hart@hii-co.com 202-264-7108 Christie Thomas (Investors) christie.thomas@hii-co.com 757-380-2104 HII Reports Second Quarter 2025 Results NEWPORT...
2025-02-07Press Release
+5.47%Hii'S Ingalls Shipbuilding Awards $95,600 In Stem Grants
2025-02-06SEC Filing (SC 13G)
-18.32%Beneficial ownership update (SC 13G).
Valuation Table
9.8/10Decision Grade