Huntington Ingalls (HII) Surges 6.2%: Is This an Indication of Further Gains?

Huntington Ingalls (HII) shares soared 6.2% in the last trading session to close at $378.47. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.3% gain over the past four weeks.

Huntington Ingalls is one of the prime industrial employers in Virginia. It is the sole designer and manufacturer of nuclear-powered aircraft carriers in the United States. More than 70% of the active U.S. Navy fleet consists of Huntington Ingalls ships.

HII’s stock rose because investors expect a sharply higher U.S. defense budget to translate into more contracts and higher revenue for major defense contractors. President Trump proposed to raise military spending to about $1.5 trillion in 2027, up from $901 billion in 2026. As a result, markets reacted positively, driving defense stocks higher on expectations of stronger long-term earnings growth.

This shipbuilder is expected to post quarterly earnings of $3.75 per share in its upcoming report, which represents a year-over-year change of +19.1%. Revenues are expected to be $3.05 billion, up 1.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Huntington Ingalls, the consensus EPS estimate for the quarter has been revised 1.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on HII going forward to see if this recent jump can turn into more strength down the road.

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

Huntington Ingalls belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, GE Aerospace (GE), closed the last trading session 2.8% lower at $314.44. Over the past month, GE has returned 14.1%.

GE's consensus EPS estimate for the upcoming report has changed +1.3% over the past month to $1.41. Compared to the company's year-ago EPS, this represents a change of +6.8%. GE currently boasts a Zacks Rank of #2 (Buy).

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

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