Bernstein has adjusted the price target for Huntington Ingalls Industries (NYSE: HII) upward to $421 from $412 but left its Market Perform rating unchanged. The revised target is still under the analyst high target of $465. Separately reported valuation metrics show HII trading at a price-to-earnings ratio of 25.2.
The analyst action comes after Huntington Ingalls released results for the fourth quarter of 2025 on February 5. The company posted earnings per share of $4.04, beating consensus estimates that were reported as $3.84 in one account and $3.83 in another. On the top line, revenue was reported at $3.48 billion in one disclosure and rounded to $3.5 billion in another, comfortably above the $3.09 billion figure that had been expected.
Despite the stronger-than-forecast earnings and revenue, the stock reacted negatively to the report. One account noted a roughly 10% decline in the share price after the earnings release; a separate pre-market move showed a fall of 14.65% to $352.63. Those selloffs occurred even as the company had delivered a very strong one-year total return of 143.6% prior to these moves.
Bernstein highlighted several investor worries that likely tempered enthusiasm. Notable among them are free cash flow that came in below consensus expectations, management’s decision to bring some revenue that had previously been expected in 2026 into 2025, and softness in shipbuilding margins. These margin issues are reflected in the company’s reported gross profit margin of 12.7%.
On the constructive side, Huntington Ingalls raised its medium-term outlook for shipbuilding revenue, targeting a 6% compound annual growth rate over the medium term. Bernstein appears to have weighed that improved shipbuilding revenue trajectory when lifting its price target even as it kept the Market Perform rating intact.
Company-level metrics cited alongside the analyst note include annual revenue of $12.48 billion and a market capitalization of approximately $15.2 billion. Huntington Ingalls also pays a dividend, with a yield noted at 1.38%.
Summary of the latest financials and market reaction:
- EPS: $4.04 reported, versus consensus figures reported as $3.84 and $3.83 in separate accounts.
- Revenue: $3.48 billion (also reported as $3.5 billion), above a $3.09 billion consensus.
- Price action: Stock fell roughly 10% after earnings in one report and registered a 14.65% pre-market decline to $352.63 in another.
- Valuation and metrics: P/E around 25.2, annual revenue $12.48 billion, market cap $15.2 billion, dividend yield 1.38%.
- Guidance and margins: Medium-term shipbuilding revenue guidance raised to a 6% CAGR; concerns over free cash flow, revenue timing shifts and soft shipbuilding margins, with gross profit margin at 12.7%.
Taken together, Bernstein’s modestly higher target on HII reflects a balance between improved medium-term shipbuilding top-line expectations and lingering concerns about cash flow, margin durability and the timing of revenue recognition. The firm appears to have acknowledged the revenue growth path while stopping short of upgrading its view on near-term operational execution or shareholder outperformance potential.
Investors monitoring Huntington Ingalls will want to pay particular attention to incoming quarterly results for signs of margin recovery, the trajectory of free cash flow relative to consensus, and whether revenue timing shifts continue to affect year-over-year comparability.