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Huntington Ingalls Benefits From Strong Naval Shipbuilding Demand
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Key Takeaways
Huntington Ingalls benefits from strong naval demand and progress across major shipbuilding programs.
Huntington Ingalls secured $4B in Q1 2026 awards, lifting backlog to a record $54B.
HII faces supplier delays, higher material costs and Newport News workforce and infrastructure constraints.
Huntington Ingalls Industries (HII - Free Report) is a leading U.S. defense shipbuilder that designs and builds nuclear-powered aircraft carriers, submarines and other advanced naval vessels. Its long-standing relationship with the U.S. Navy and strong demand for naval modernization programs are expected to support its long-term growth.
However, this Zacks Rank #3 (Hold) company faces supply-chain issues and higher material costs that may create operational challenges in the near term.
HII’s Tailwinds
Huntington Ingalls continues to strengthen its position in U.S. naval shipbuilding. It is the sole designer and manufacturer of nuclear-powered aircraft carriers in the United States, and more than 70% of the active U.S. Navy fleet consists of ships built by the company. It has made steady progress across its major shipbuilding programs. In the first quarter of 2026, the company completed builder’s sea trials for aircraft carrier John F. Kennedy (CVN 79) and for USS Zumwalt (DDG 1000), while Ingalls authenticated the keel of amphibious transport dock Philadelphia (LPD 32) and advanced work on the destroyer programs.
The company also expanded its capabilities in autonomous and unmanned systems through several new partnerships. In April 2026, HII signed a memorandum of understanding with Applied Intuition, Inc., a leader in physical AI, to jointly develop and integrate AI-enabled capabilities for next-generation naval platforms. Meanwhile, the launch of the ROMULUS family of unmanned surface vessels showcases the company’s ability to blend in-house technology with partner expertise, offering advanced and modular solutions designed to meet evolving defense needs.
Strong demand for Huntington Ingalls’ products continues to drive order growth. The company secured $4 billion in contract awards during the first quarter of 2026, resulting in a record backlog of $54 billion as of March 31, 2026, of which about $31.97 billion was funded. Such a robust backlog provides strong revenue visibility for the coming years.
Headwinds for HII
Huntington Ingalls relies heavily on subcontractors and third-party suppliers for critical materials and components. Supply disruptions, cost increases or delays from suppliers can raise contract costs and affect project timelines, which may pressure margins if actual costs exceed pricing assumptions in government contracts.
The company’s Newport News Shipbuilding segment has also been facing performance challenges in aircraft carrier construction due to workforce shortages, supply-chain disruptions and infrastructure constraints. During the first quarter of 2026, Huntington Ingalls’ cumulative catch-up revenue adjustments included unfavorable adjustments of $65 million. While efforts to hire and train new workers are underway, high turnover and the long training period for specialized skills challenges are likely to persist in the near term. So, Newport News may continue to grapple with these performance issues through at least the next decade.
HII Stock’s Price Performance
Shares of HII have gained 26.8% in the past year compared with the industry’s 7.3% growth.
Heico delivered an average earnings surprise of 13.82% in the last four quarters. The consensus estimate for HEI’s fiscal 2026 earnings stands at $5.78 per share, which suggests year-over-year growth of 18%.
Woodward delivered an average earnings surprise of 16.97% in the last four quarters. The Zacks Consensus Estimate for WWD’s fiscal 2026 earnings is pinned at $9.34 per share, which indicates year-over-year growth of 35.6%.
Teledyne Technologies delivered an average earnings surprise of 4.69% in the last four quarters. The consensus estimate for TDY’s 2026 earnings is pegged at $24.01 per share, which implies year-over-year growth of 9.2%.
View the Zacks #1 Rank List
Image: Bigstock
Huntington Ingalls Benefits From Strong Naval Shipbuilding Demand
Key Takeaways
Huntington Ingalls Industries (HII - Free Report) is a leading U.S. defense shipbuilder that designs and builds nuclear-powered aircraft carriers, submarines and other advanced naval vessels. Its long-standing relationship with the U.S. Navy and strong demand for naval modernization programs are expected to support its long-term growth.
However, this Zacks Rank #3 (Hold) company faces supply-chain issues and higher material costs that may create operational challenges in the near term.
HII’s Tailwinds
Huntington Ingalls continues to strengthen its position in U.S. naval shipbuilding. It is the sole designer and manufacturer of nuclear-powered aircraft carriers in the United States, and more than 70% of the active U.S. Navy fleet consists of ships built by the company. It has made steady progress across its major shipbuilding programs. In the first quarter of 2026, the company completed builder’s sea trials for aircraft carrier John F. Kennedy (CVN 79) and for USS Zumwalt (DDG 1000), while Ingalls authenticated the keel of amphibious transport dock Philadelphia (LPD 32) and advanced work on the destroyer programs.
The company also expanded its capabilities in autonomous and unmanned systems through several new partnerships. In April 2026, HII signed a memorandum of understanding with Applied Intuition, Inc., a leader in physical AI, to jointly develop and integrate AI-enabled capabilities for next-generation naval platforms. Meanwhile, the launch of the ROMULUS family of unmanned surface vessels showcases the company’s ability to blend in-house technology with partner expertise, offering advanced and modular solutions designed to meet evolving defense needs.
Strong demand for Huntington Ingalls’ products continues to drive order growth. The company secured $4 billion in contract awards during the first quarter of 2026, resulting in a record backlog of $54 billion as of March 31, 2026, of which about $31.97 billion was funded. Such a robust backlog provides strong revenue visibility for the coming years.
Headwinds for HII
Huntington Ingalls relies heavily on subcontractors and third-party suppliers for critical materials and components. Supply disruptions, cost increases or delays from suppliers can raise contract costs and affect project timelines, which may pressure margins if actual costs exceed pricing assumptions in government contracts.
The company’s Newport News Shipbuilding segment has also been facing performance challenges in aircraft carrier construction due to workforce shortages, supply-chain disruptions and infrastructure constraints. During the first quarter of 2026, Huntington Ingalls’ cumulative catch-up revenue adjustments included unfavorable adjustments of $65 million. While efforts to hire and train new workers are underway, high turnover and the long training period for specialized skills challenges are likely to persist in the near term. So, Newport News may continue to grapple with these performance issues through at least the next decade.
HII Stock’s Price Performance
Shares of HII have gained 26.8% in the past year compared with the industry’s 7.3% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the same sector are Heico (HEI - Free Report) , Woodward (WWD - Free Report) and Teledyne Technologies (TDY - Free Report) . HEI currently sports a Zacks Rank #1 (Strong Buy). WWD and TDY carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heico delivered an average earnings surprise of 13.82% in the last four quarters. The consensus estimate for HEI’s fiscal 2026 earnings stands at $5.78 per share, which suggests year-over-year growth of 18%.
Woodward delivered an average earnings surprise of 16.97% in the last four quarters. The Zacks Consensus Estimate for WWD’s fiscal 2026 earnings is pinned at $9.34 per share, which indicates year-over-year growth of 35.6%.
Teledyne Technologies delivered an average earnings surprise of 4.69% in the last four quarters. The consensus estimate for TDY’s 2026 earnings is pegged at $24.01 per share, which implies year-over-year growth of 9.2%.