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Huntington Ingalls Industries, Inc. (HII) designs, builds, overhauls, and repairs military ships and is worth a market cap of $10.1 billion. The Newport News, Virginia-headquartered company also provides a wide range of professional services, including defense and federal solutions, nuclear and environmental services, and unmanned systems to partners in government and industry.
Companies worth $10 billion or more are generally labeled as “large-cap” stocks, and Huntington Ingalls fits right into that category. The company is recognized as America’s largest military shipbuilder, known for its advanced engineering and defense technologies. It is the sole builder of amphibious ships and has delivered 15 large-deck ships to the U.S. Navy.
However, its not all sunshine and rainbow for the stock. Shares of HII have retreated 36.4% from their 52-week high of $299.50, which they reached on Mar. 5. HII has plummeted 27.6% over the past three months, underperforming the S&P 500 Index’s ($SPX) 4.1% returns over the same time frame.
HII stock has declined 23.2% over the past six months, lagging behind SPX’s 8.9% gains. Moreover, shares of HII have decreased 26.3% over the past 52 weeks, underperforming SPX’s 24.9% rally.
HII has been trading below its 200-day and 50-day moving average since the end of September, indicating a bearish trend.
On Dec. 18, Huntington Ingalls’ shares edged up marginally after TD Cowen noted that a "complicated" continuing resolution and emergency funding package agreed upon by U.S. lawmakers could benefit the company.
On the flip side, shares of HII dipped over 26% after releasing its weaker-than-expected Q3 earnings report on Oct. 31. The company posted a 30.8% year-over-year decline in EPS to $2.56, significantly missing the consensus estimate of $3.84. Revenue also decreased by 2.4% year-over-year to $2.75 billion, falling short of Wall Street’s expectation of $2.88 billion.
HII has also lagged behind its rival, General Dynamics Corporation (GD), which gained 3.4% over the past 52 weeks.
As HII underperformed relative to its industry peers, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the 10 analysts covering the stock, and the mean price target of $222.40 suggests a premium of 16.8% to its current price levels.
