Al Root

Shares of shipbuilder Huntington Ingalls Industries got another boost from Wall Street. That's two in two trading days. The latest bit of good news, however, wasn't a stock upgrade.

On Monday, Citi put Huntington's stock on its North American "Focus List, " which include "our analysts' non-consensus, high-conviction Buy ideas for the next 12 months."

Citi analyst Jason Gursky rates Huntington stock at Buy, and has a $235 target price.

"We are constructive on Huntington Ingalls given U.S. spending priorities that favor shipbuilding and C4ISR [Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance] -- the key focus areas of the company," wrote Gursky. "The President is establishing a White House shipbuilding office, further demonstrating the country's commitment to this portion of the defense industrial base."

There remains some concern about submarine delays, and contracting issues, but Gursky sees things improving throughout 2025.

Huntington shares were up 1.8% at $219.72, while S&P 500 and Dow Jones Industrial Average futures were up 1.4% and 1%, respectively. Many stocks benefited from President Donald Trump's decision to exclude smartphones and some electronics from his most severe import tariffs, though Commerce Secretary Howard Lutnick said Sunday that "sectorial" tariffs on the semiconductor sector were coming.

The early Monday rise came after Huntington shares gained 7.4% on Friday, after Goldman Sachs analyst Noah Poponak upgraded shares to Buy.

His resonating is similar to Gursky's. "We expect Navy shipbuilding to be [a] relatively high priority within the defense budget medium-term and for Huntington to benefit," says Poponak. "A recent executive order appears to cement the administration's focus on domestic maritime labor, supply chains, and production, and there is the possibility for Shipyard Accountability and Workforce Support $(SAWS)$ language to be implemented in the future. That could drive margin upside for Huntington."

Poponak's price target on Huntington stock rose to $234 from $145.

Poponak and Gursky's calls look out of consensus. Overall, just 31% of analysts covering Huntington stock have Buy ratings. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Huntington's stock is about $193.

Coming into Monday trading, Huntington shares were down about 22% year to date as delays and higher costs have weighed on investor sentiment. However, the stars could be aligning for the Navy shipbuilder, pointing to smooth sailing ahead.

Write to Al Root at allen.root@dowjones.com

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April 14, 2025 08:30 ET (12:30 GMT)

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