DCF Studio

    HII · NYQ · Industrials

    Huntington Ingalls Industries, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 293.77

    Market price

    USD 313.70

    Implied upside

    -6.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 293.77-6.4%
    Exit multiple
    USD 416.13+32.7%
    Market price
    USD 313.70

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m322m644mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 13.5bnUSD 14.3bnUSD 15.2bnUSD 16.0bnUSD 16.8bnUSD 17.5bnUSD 18.2bnUSD 18.9bnUSD 19.4bnUSD 19.9bn+4.4%
    EBITUSD 689.2mUSD 733.2mUSD 776.5mUSD 818.5mUSD 858.8mUSD 897.0mUSD 932.4mUSD 964.8mUSD 993.6mUSD 1.0bn+4.4%
    NOPATUSD 552.7mUSD 587.9mUSD 622.6mUSD 656.3mUSD 688.6mUSD 719.2mUSD 747.7mUSD 773.6mUSD 796.7mUSD 816.6m+4.4%
    Add depreciation & amortisationUSD 399.3mUSD 424.8mUSD 449.8mUSD 474.2mUSD 497.5mUSD 519.6mUSD 540.2mUSD 558.9mUSD 575.6mUSD 590.0m+4.4%
    Less capital expenditureUSD -391.4mUSD -431.4mUSD -472.7mUSD -515.0mUSD -557.9mUSD -600.9mUSD -643.7mUSD -685.8mUSD -726.5mUSD -765.5m+7.7%
    Capex, % of revenue2.9%3.0%3.1%3.2%3.3%3.4%3.5%3.6%3.7%3.8%-
    Less increase in working capitalUSD -4.1mUSD -3.6mUSD -3.5mUSD -3.4mUSD -3.3mUSD -3.1mUSD -2.9mUSD -2.6mUSD -2.3mUSD -2.0m-7.7%
    Free cashflow to firmUSD 556.4mUSD 577.8mUSD 596.2mUSD 612.1mUSD 625.0mUSD 634.8mUSD 641.2mUSD 644.1mUSD 643.4mUSD 639.1m+1.6%
    Discount factor0.97000.91270.85870.80800.76020.71530.67300.63320.59580.5606-
    Present valueUSD 539.7mUSD 527.3mUSD 512.0mUSD 494.6mUSD 475.2mUSD 454.1mUSD 431.5mUSD 407.9mUSD 383.4mUSD 358.3m-
    Present Value Of The ForecastUSD 4.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.428Reported 0.147, pulled toward 1.0 (Blume)
    Cost of equity6.71%Risk-free + beta x equity risk premium
    Cost of debt5.59%Risk-free + 70bp, the spread for a A+ rating at 5.8x interest cover. Book interest / average debt was lower, at 3.3%.
    Market capitalisationUSD 12.4bn80.9% of capital
    Total debtUSD 2.9bn19.1% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC6.28%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 293.77

    67% of EV

    Forecast FCFF, final year
    USD 639.1m
    Capex at depreciation, working capital in reinvestment
    USD 984.6m
    Less reinvestment at g/ROIC (39.1% of NOPAT)
    USD -385.0m
    Capitalised
    USD 599.6m
    ROIC (reported)
    6.4%
    Terminal value, undiscounted
    USD 16.3bn
    Terminal value, discounted
    USD 9.1bn
    Enterprise value
    USD 13.7bn
    Less net debt
    USD 2.1bn
    Equity value
    USD 11.5bn

    Exit at 15.4x EBITDA

    Value per shareUSD 416.13

    75% of EV

    Terminal value, undiscounted
    USD 24.8bn
    Terminal value, discounted
    USD 13.9bn
    Enterprise value
    USD 18.5bn
    Less net debt
    USD 2.1bn
    Equity value
    USD 16.4bn

    Spread between methods: 34%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.28%556.15596.36662.18783.591067.23
    5.28%395.47401.68411.97429.00458.47
    6.28%301.98297.79293.76289.98286.58
    7.28%249.32245.31241.31237.31233.30
    8.28%210.69207.36204.03200.71197.38

    Outlined: this model. Green text: above today's price of 313.70. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.4%4.8%5.4%
    EBIT margin6.5%5.1%5.5%
    Discount rate-6.3%6.1%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.