Huntington Ingalls Industries' stock surged 5.08% during intraday trading on Thursday, following a significant analyst upgrade and positive sector commentary.
The sharp rise came after BofA Securities upgraded the defense contractor to "Neutral" from "Underperform" and raised its price target to $400 from $300. The firm cited strong macroeconomic fundamentals in the shipbuilding sector, which it believes will help offset margin and execution challenges at the company's shipyards.
BofA highlighted that Huntington Ingalls is poised to benefit from substantial government spending, with the US Navy's Virginia Class Block VI awards, maturation of the new frigate program, and finalization plans for the Trump-class battleship expected to drive stronger revenues and profits. The analyst note described the current environment as a "golden age for shipbuilding," fueled by national security priorities.