Barclays Maintains an 'Equalweight' on Huntington Ingalls (HII); Solid Quarter, but Risk Items Remain

Barclays maintains an 'Equalweight' on Huntington Ingalls (NYSE: HII) price target of $33.00.

Barclays analyst says, "Overall, excluding the one-time goodwill charge, HII Q3 earnings were better than we expected largely due to better margins at Newport. However, we suspect this better performance was due to timing of positive performance incentives, and are likely unsustainable (we speculate these incentives added ~$0.12 in the quarter). Otherwise, while the company re-affirmed its longer-term revenue and margin forecast, we think these targets are subject to revision pending budgetary outcomes. We note progress on the zero margin "problem" LPD and LHA ships but until these ships are delivered, we think investors will remain anxious. Therefore, despite HII's impressive one-month performance (+23% vs S&P 500 +4%), we think we need more visibility on these risks items in order for HII shares to appreciate above our $33 price target."

For an analyst ratings summary and ratings history on Huntington Ingalls click here. For more ratings news on Huntington Ingalls click here.

Shares of Huntington Ingalls closed at $31.00 yesterday.

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