Huntington Ingalls: The Submarine Boom Is Not Priced In

Huntington Ingalls Industries (HII) delivered strong Q2 2026 results with 10.9% revenue growth and 30.2% segment operating income increase. I raised my rating to Buy as HII's improved throughput, labor retention, and submarine contracts support credible medium-term margin expansion. Management increased 2026 shipbuilding revenue guidance by $500 million and raised the lower end of margin guidance to 6.0%-6.5%. Despite a 23% stock pullback, HII offers 25–39% upside to base and upbeat price targets, with backlog at $57.3 billion.

Huntington Ingalls Industries (NYSE: HII ) has lost around 23% of its value since my mid-February report in which I upgraded the stock from hold to buy. That has been a rating upgrade that has not