HII
Huntington Ingalls Industries, Inc.
$265.76
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Fair Value
Trading 18.8% below fair value
You pay
$265.76
Bear
$267.70
Fair
$327.18
Bull
$386.67
Bear
$267.70
+0.7%
$14.87 × 18x
Fair
$327.18
+23.1%
$14.87 × 22x
Bull
$386.67
+45.5%
$14.87 × 26x
Adjust Assumptions
22.0x
14.87$
Key Value Driver
Through-cycle normalized EPS ($14.87)
Implied Market Multiple
17.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$363.67
Divergence from AlphaVal
10%
Summary
Using 7-year normalized EPS of $14.87 at a 22x cycle multiple, the base-case value is $327.18 per share. P/TBV cross-check: 6.1x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Price-to-book value of 6.1x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing