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Huntington (HII) Wins $154.8M Deal for DDG 1000 Surface Ship
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Huntington Ingalls Industries, Inc.’s (HII - Free Report) business unit, Ingalls, recently clinched a modification contract involving the modernization of the DDG 1000 combat ship with upgraded technology.
Valued at $154.8 million, the contract is expected to be completed by September 2025. The work related to the deal will be carried out in Pascagoula, MS.
What’s Favoring Huntington Ingalls?
DDG 1000, also known as Zumwalt-class destroyers, marks the pioneering use of an advanced and extremely resilient Integrated Power System among U.S. Navy surface combatants. It boasts features that provide power to propulsion and combat system loads from the same gas turbine prime movers. This makes the ship a unique and top choice in the U.S. Navy.
Huntington’s Ingalls unit, which designs and constructs non-nuclear ships for the U.S. Navy and the U.S. Coast Guard, will further upgrade the lethal DDG 1000 combat ship with advanced technology so that it continues to serve the U.S. Navy with all evolving warship requirements. This should further boost the demand for this warship.
Considering the importance and demand for the combatant ship, HII is well-poised to win several significant awards involving the modernization of DDG 1000 in the days ahead, like the latest one. This should benefit the company and boost its revenue generation prospects.
Growth Prospects
With increased spending by nations for strengthening their sea warfare capabilities, the military shipbuilding market may witness strong demand. Per Mordor Intelligence, the global shipbuilding market is expected to witness a CAGR of more than 4.8% over the 2023-2028 period. This should boost Huntington Ingalls’ prospects as it remains one of the major contractors for military ship manufacturing.
Other prominent defense majors that are likely to enjoy the perks of the expanding shipbuilding market are Mitsubishi Heavy Industries (MHVYF - Free Report) , BAE Systems plc (BAESY - Free Report) and General Dynamics (GD - Free Report) .
Mitsubishi Heavy Industries manufactures naval surface ships and submarines. The company also provides after-sales services for destroyers and submarines.
The Zacks Consensus Estimate for 2023 earnings calls for a growth rate of 44.6% from the prior-year reported figure. Mitsubishi’s long-term earnings growth rate is pegged at 3.5%. Shares of MHVYF have returned 54.7% value to its investors in the past year.
BAE Systems designs and manufactures naval ships and submarines, as well as state-of-the-art combat systems and equipment. It also offers an array of associated services, including training solutions, maintenance and modernization programs, to support ships and equipment in service worldwide.
BAE Systems boasts a long-term earnings growth rate of 14%. BAESY shares have soared 43.1% in the past year.
General Dynamics’ unit, Bath Iron Works, is the leading designer and builder of the Arleigh Burke (DDG 51) class of AEGIS destroyers. In August 2023, the company was awarded a contract from the U.S. Navy to construct three Flight III Arleigh Burke-class destroyers. There are currently six DDG 51 destroyers in production at Bath Iron Works.
GD boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates an improvement of 7.3% from the year-ago reported figure.
Price Movement
In the past three months, shares of Huntington Ingalls have increased 8.8% compared with the industry’s rise of 1.1%.
Image: Shutterstock
Huntington (HII) Wins $154.8M Deal for DDG 1000 Surface Ship
Huntington Ingalls Industries, Inc.’s (HII - Free Report) business unit, Ingalls, recently clinched a modification contract involving the modernization of the DDG 1000 combat ship with upgraded technology.
Valued at $154.8 million, the contract is expected to be completed by September 2025. The work related to the deal will be carried out in Pascagoula, MS.
What’s Favoring Huntington Ingalls?
DDG 1000, also known as Zumwalt-class destroyers, marks the pioneering use of an advanced and extremely resilient Integrated Power System among U.S. Navy surface combatants. It boasts features that provide power to propulsion and combat system loads from the same gas turbine prime movers. This makes the ship a unique and top choice in the U.S. Navy.
Huntington’s Ingalls unit, which designs and constructs non-nuclear ships for the U.S. Navy and the U.S. Coast Guard, will further upgrade the lethal DDG 1000 combat ship with advanced technology so that it continues to serve the U.S. Navy with all evolving warship requirements. This should further boost the demand for this warship.
Considering the importance and demand for the combatant ship, HII is well-poised to win several significant awards involving the modernization of DDG 1000 in the days ahead, like the latest one. This should benefit the company and boost its revenue generation prospects.
Growth Prospects
With increased spending by nations for strengthening their sea warfare capabilities, the military shipbuilding market may witness strong demand. Per Mordor Intelligence, the global shipbuilding market is expected to witness a CAGR of more than 4.8% over the 2023-2028 period. This should boost Huntington Ingalls’ prospects as it remains one of the major contractors for military ship manufacturing.
Other prominent defense majors that are likely to enjoy the perks of the expanding shipbuilding market are Mitsubishi Heavy Industries (MHVYF - Free Report) , BAE Systems plc (BAESY - Free Report) and General Dynamics (GD - Free Report) .
Mitsubishi Heavy Industries manufactures naval surface ships and submarines. The company also provides after-sales services for destroyers and submarines.
The Zacks Consensus Estimate for 2023 earnings calls for a growth rate of 44.6% from the prior-year reported figure. Mitsubishi’s long-term earnings growth rate is pegged at 3.5%. Shares of MHVYF have returned 54.7% value to its investors in the past year.
BAE Systems designs and manufactures naval ships and submarines, as well as state-of-the-art combat systems and equipment. It also offers an array of associated services, including training solutions, maintenance and modernization programs, to support ships and equipment in service worldwide.
BAE Systems boasts a long-term earnings growth rate of 14%. BAESY shares have soared 43.1% in the past year.
General Dynamics’ unit, Bath Iron Works, is the leading designer and builder of the Arleigh Burke (DDG 51) class of AEGIS destroyers. In August 2023, the company was awarded a contract from the U.S. Navy to construct three Flight III Arleigh Burke-class destroyers. There are currently six DDG 51 destroyers in production at Bath Iron Works.
GD boasts a long-term earnings growth rate of 8.9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates an improvement of 7.3% from the year-ago reported figure.
Price Movement
In the past three months, shares of Huntington Ingalls have increased 8.8% compared with the industry’s rise of 1.1%.
Image Source: Zacks Investment Research
Zacks Rank
Huntington Ingalls currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.