Huntington Ingalls Wins Deal to Aid Aircraft Carriers & Surface Ships

Huntington Ingalls Industries Inc.’s HII subsidiary, Fleet Support Group LLC, recently secured a contract to provide global engineering and technical support for the overhaul and repair of equipment and systems associated with west coast aircraft carriers and surface ships. The deal has been provided by the Southwest Regional Maintenance Center, San Diego, CA.

Valued at $16.8 million, the contract is expected to be completed by July 2026. The work related to this contract will be executed in San Diego, CA; Bremerton, WA; and Yokosuka, Japan.

HII: A Premier Supplier of Naval Ships

Naval ships, including aircraft carriers and surface combatants, play a critical role in a nation’s ability to effectively command, control and coordinate its naval operations, protecting its onshore territory. With the United States being a stalwart in the global defense map, its naval power has been formidable, with Huntington Ingalls being a premier naval defense contractor for the nation.

Huntington Ingalls’ Newport News unit has designed and built more than 31 aircraft carriers for the U.S. Navy since 1933, including all 10 Nimitz-class (CVN 68) aircraft carriers currently in active service. To sustain its leadership in U.S. naval defense, HII is now building the next generation of Gerald R. Ford-class aircraft carriers.

The company is also a prominent contractor for surface combatant vessels like Arleigh Burke-class guided missile destroyers.

With more than 135 years of experience in building naval ships and aircraft carriers, HII continues to secure a steady stream of orders, like the latest one, which boosts its revenue generation prospects.

HII’s Growth Potential

With increasing geopolitical issues and territorial disputes in recent times, nations are fortifying their naval capacity, which has led to augmented spending on naval warships.

This is likely to have prompted the Fortune Business Insights firm to forecast a compound annual growth rate of 5.6% for the global naval vessels and surface combatant market during the 2023-2030 period. Such market projections are likely to benefit Huntington Ingalls, America’s largest military shipbuilder, and sole designer and builder of nuclear-powered aircraft carriers and surface ships.

Opportunities for Other Defense Stocks

Apart from HII, defense players that can gain from the expanding global shipbuilding market are discussed below:

General Dynamics Corporation GD: The company is a prominent contractor in the defense shipbuilding market. Its Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy.

GD has a long-term (three to five years) earnings growth rate of 10.7%. The Zacks Consensus Estimate for the company’s 2025 sales indicates year-over-year growth of 7.2%.

BAE Systems BAESY: The company designs, builds, commissions, repairs and services a wide range of complex navy ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom.

BAESY has a long-term earnings growth rate of 14.5%. The Zacks Consensus Estimate for the company’s 2025 sales implies a year-over-year improvement of 63.4%.

Lockheed Martin LMT: The company manufactures Littoral Combat Ships (“LCS”). Its freedom-variant LCS is a resilient, flexible warship designed to serve the evolving missions of the U.S. Navy. Its speed, strength and versatility make it a critical tool in crucial missions.

LMT has a long-term earnings growth rate of 10.3%. The Zacks Consensus Estimate for the company’s 2025 sales calls for a year-over-year increase of 4.6%.

HII Stock Price Movement

In the past six months, HII shares have surged 55.3% compared with the industry’s rise of 18.9%.

HII’s Zacks Rank

HII currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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