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Huntington Ingalls (HII) to Boost Zumwalt-Class Destroyer
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Huntington Ingalls Industries Inc.’s (HII - Free Report) Mission Technologies business segment recently clinched a contract to conduct research, analyze and develop enhanced capabilities for the Mk 41 and Mk 57 vertical launching systems onboard U.S. Navy surface ships. The award has been provided by the Naval Surface Warfare Center Port Hueneme Division.
Details of the Deal
Per the deal, valued at $74 million, Huntington Ingalls will equip the first Zumwalt-class destroyer (DDG 1001) with the latest Mk 57 VLS universal canister electronics unit.
Majority of the work related to this contract will be carried out in Syracuse, NY, and Arlington, VA.
What’s Favoring Huntington Ingalls?
As nations continue to strengthen their defense structure, defense spending on military arms and ammunition continues to increase manifold. This also includes increased investments in naval missiles and missile launch systems as they play a critical role in sea defense missions and act as a deterrent against enemy attacks. Notably, Huntington Ingalls’ Mission Technologies plays a critical role in providing integrated solutions for the U.S. Navy and other U.S. allies.
Notably, this segment’s capabilities include C5ISR systems and operations, the application of Artificial Intelligence (AI) and Machine Learning to battlefield decisions, defensive and offensive cyberspace strategies, and electronic warfare. In 2023, Mission Technologies’ 81% of revenues were generated from the U.S. Navy.
Considering such growth prospects and Huntington Ingalls’ expertise in providing support services for critical naval ships like DDG 1001, the company may witness a significant order flow, like the latest one. This will continue to boost its revenue generation prospects.
Growth Prospects
With increased spending by nations for strengthening their sea warfare capabilities, the naval shipbuilding market is expected to witness strong demand. Per the Mordor Intelligence firm, the naval combat vessels market is expected to witness a CAGR of 7% over the 2024-2029 period. This should boost Huntington Ingalls’ prospects, with this company being the largest shipbuilder in the United States, which constitutes a major portion of the global naval combat vessels market.
Notably, Huntington Ingalls designs and constructs amphibious assault ships, surface combatants, nuclear-powered aircraft carriers and non-nuclear ships.
Some other defense players that can gain from the expanding naval combat vessels market are Lockheed Martin (LMT - Free Report) , BAE Systems (BAESY - Free Report) and General Dynamics (GD - Free Report) .
Lockheed Martin’s Rotary and Mission Systems (RMS) designs, manufactures, services and supports various surface ships. It is engaged in the construction of Freedom-variant Littoral Combat Ship, which is a resilient and flexible warship. The AEGIS Combat System is the U.S. Navy’s most modern surface combat system. RMS ended 2023 with a backlog of $37.73 billion.
LMT boasts a long-term (three-to five-years) growth rate of 4.2%. The Zacks Consensus Estimate for 2024 sales indicates growth of 2.7% from 2023.
BAE Systems designs, builds, commissions, repairs and supports a full range of complex naval ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom. It also works on the Astute and Dreadnaught class submarines.
BAESY boasts a long-term earnings growth rate of 12.9%. The Zacks Consensus Estimate for 2024 sales indicates growth of 34.1% from 2023.
General Dynamics’ Marine Systems segment is the leading designer of surface combatant and auxiliary ship design and construction for the U.S. Navy. Its major programs include Arleigh Burke-class (DDG-51) guided-missile destroyer. The unit, comprising 29% of GD’s total revenues in 2023, ended the year with a backlog of $45.9 billion.
GD boasts a long-term earnings growth rate of 10.8%. The Zacks Consensus Estimate for 2024 sales indicates growth of 10% from 2023.
Price Performance
In the past year, shares of Huntington Ingalls have gained 31.7% against the industry’s 14.8% decline.
Image: Bigstock
Huntington Ingalls (HII) to Boost Zumwalt-Class Destroyer
Huntington Ingalls Industries Inc.’s (HII - Free Report) Mission Technologies business segment recently clinched a contract to conduct research, analyze and develop enhanced capabilities for the Mk 41 and Mk 57 vertical launching systems onboard U.S. Navy surface ships. The award has been provided by the Naval Surface Warfare Center Port Hueneme Division.
Details of the Deal
Per the deal, valued at $74 million, Huntington Ingalls will equip the first Zumwalt-class destroyer (DDG 1001) with the latest Mk 57 VLS universal canister electronics unit.
Majority of the work related to this contract will be carried out in Syracuse, NY, and Arlington, VA.
What’s Favoring Huntington Ingalls?
As nations continue to strengthen their defense structure, defense spending on military arms and ammunition continues to increase manifold. This also includes increased investments in naval missiles and missile launch systems as they play a critical role in sea defense missions and act as a deterrent against enemy attacks. Notably, Huntington Ingalls’ Mission Technologies plays a critical role in providing integrated solutions for the U.S. Navy and other U.S. allies.
Notably, this segment’s capabilities include C5ISR systems and operations, the application of Artificial Intelligence (AI) and Machine Learning to battlefield decisions, defensive and offensive cyberspace strategies, and electronic warfare. In 2023, Mission Technologies’ 81% of revenues were generated from the U.S. Navy.
Considering such growth prospects and Huntington Ingalls’ expertise in providing support services for critical naval ships like DDG 1001, the company may witness a significant order flow, like the latest one. This will continue to boost its revenue generation prospects.
Growth Prospects
With increased spending by nations for strengthening their sea warfare capabilities, the naval shipbuilding market is expected to witness strong demand. Per the Mordor Intelligence firm, the naval combat vessels market is expected to witness a CAGR of 7% over the 2024-2029 period. This should boost Huntington Ingalls’ prospects, with this company being the largest shipbuilder in the United States, which constitutes a major portion of the global naval combat vessels market.
Notably, Huntington Ingalls designs and constructs amphibious assault ships, surface combatants, nuclear-powered aircraft carriers and non-nuclear ships.
Some other defense players that can gain from the expanding naval combat vessels market are Lockheed Martin (LMT - Free Report) , BAE Systems (BAESY - Free Report) and General Dynamics (GD - Free Report) .
Lockheed Martin’s Rotary and Mission Systems (RMS) designs, manufactures, services and supports various surface ships. It is engaged in the construction of Freedom-variant Littoral Combat Ship, which is a resilient and flexible warship. The AEGIS Combat System is the U.S. Navy’s most modern surface combat system. RMS ended 2023 with a backlog of $37.73 billion.
LMT boasts a long-term (three-to five-years) growth rate of 4.2%. The Zacks Consensus Estimate for 2024 sales indicates growth of 2.7% from 2023.
BAE Systems designs, builds, commissions, repairs and supports a full range of complex naval ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom. It also works on the Astute and Dreadnaught class submarines.
BAESY boasts a long-term earnings growth rate of 12.9%. The Zacks Consensus Estimate for 2024 sales indicates growth of 34.1% from 2023.
General Dynamics’ Marine Systems segment is the leading designer of surface combatant and auxiliary ship design and construction for the U.S. Navy. Its major programs include Arleigh Burke-class (DDG-51) guided-missile destroyer. The unit, comprising 29% of GD’s total revenues in 2023, ended the year with a backlog of $45.9 billion.
GD boasts a long-term earnings growth rate of 10.8%. The Zacks Consensus Estimate for 2024 sales indicates growth of 10% from 2023.
Price Performance
In the past year, shares of Huntington Ingalls have gained 31.7% against the industry’s 14.8% decline.
Image Source: Zacks Investment Research
Zacks Rank
Huntington Ingalls currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.