Huntington Ingalls Industries Inc. HII recently secured a contract to provide elevator support unit maintenance and repair services for U.S. Navy aircraft carriers and amphibious ships. The work will support naval operations both within and outside the continental United States, including forward-deployed locations. The contract was awarded by the Naval Sea Systems Command in Washington, D.C.
Valued at nearly $417.7 million, the contract is expected to be completed in June 2031.
Growth Prospects for HII
According to a report from the Mordor Intelligence firm, nations across the globe are fortifying their defense spending on military weapons and arsenals as they look to strengthen their defense capabilities. This also includes augmented spending on navy ships for enhanced sea warfare capabilities. Mordor Intelligence also forecasts that the naval vessels market will witness a compound annual growth rate of 6.12% during the 2026-2031 period.
Such increased spending tends to benefit Huntington Ingalls as its Ingalls Shipbuilding segment constructs amphibious assault ships, expeditionary warfare ships, surface combatants and national security cutters for the U.S. Navy and boasts a strong portfolio of products. The company’s Newport News segment is involved in the design and construction of nuclear-powered aircraft carriers and submarines.
Huntington Ingalls continues to enjoy a consistent flow of orders, like the latest one, which boosts its revenue generation prospects.
Opportunities for Other Defense Stocks
Some other defense players that can gain from the expanding naval vessel market are discussed below.
Lockheed Martin LMT: Lockheed’s Rotary and Mission Systems unit supports integrated warfare systems and sensors programs such as the AEGIS Combat System, the Littoral Combat Ship and Multi-Mission Surface Combatant for the U.S. Navy and other allies.
LMT’s long-term (three-to five-year) earnings growth rate is 18.5%. The Zacks Consensus Estimate for 2026 sales implies growth of 5.3% from the prior-year figure.
BAE Systems plc BAESY: The company commissions, designs, builds, repairs and services a wide range of complex navy ships, including aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom.
BAESY has a long-term earnings growth rate of 15%. The Zacks Consensus Estimate for the company’s 2026 sales suggests a year-over-year increase of 56.4%.
General Dynamics GD: General Dynamics’ Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy.
GD’s long-term earnings growth rate is 9.7%. The Zacks Consensus Estimate for 2026 sales implies growth of 4.7% from the prior-year figure.
Price Performance
In the past year, shares of HII have gained 20.3% compared with the industry’s 3.9% growth.
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Zacks Rank
HII currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Lockheed Martin Corporation (LMT): Free Stock Analysis Report
General Dynamics Corporation (GD): Free Stock Analysis Report
Bae Systems PLC (BAESY): Free Stock Analysis Report
Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).