UPDATE - UBS Initiates Coverage on Huntington Ingalls (HII) with a Buy; Awaiting Carrier Cuts
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Price: $298.20 -1.06%
Rating Summary:
10 Buy, 12 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
10 Buy, 12 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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UPDATE - UBS initiates coverage on shares of Huntington Ingalls (NYSE: HII) with a Buy rating and $24 price target.
UBS analyst said, "We view valuation as reasonable, trading at a discount to defense, while we think HII’s unique margin opportunity limits EPS downside through the defense downturn. However, we are cautious given what we see as meaningful risk to Navy shipbuilding, particularly aircraft carriers, which constitute 35-40% of HII’s revenues and 50% of its EBIT."
"Waiting for budget clarity - Our EPS estimates are 15-20% below-consensus as we incorporate significant cuts to Navy shipbuilding including a 50%+ decline for aircraft carriers, and a return to one-per-year production rates on Virginia class submarine, along with only modest margin improvement to 4-5% on the Gulf, well below HII’s target at 9%+. Overall we still see EPS holding relatively flat, but are waiting for budget clarity and EPS expectations to reset for what is likely a big pension headwind."
To see more ratings changes on HII, Click Here
UBS analyst said, "We view valuation as reasonable, trading at a discount to defense, while we think HII’s unique margin opportunity limits EPS downside through the defense downturn. However, we are cautious given what we see as meaningful risk to Navy shipbuilding, particularly aircraft carriers, which constitute 35-40% of HII’s revenues and 50% of its EBIT."
"Waiting for budget clarity - Our EPS estimates are 15-20% below-consensus as we incorporate significant cuts to Navy shipbuilding including a 50%+ decline for aircraft carriers, and a return to one-per-year production rates on Virginia class submarine, along with only modest margin improvement to 4-5% on the Gulf, well below HII’s target at 9%+. Overall we still see EPS holding relatively flat, but are waiting for budget clarity and EPS expectations to reset for what is likely a big pension headwind."
To see more ratings changes on HII, Click Here
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