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Huntington Ingalls Industries HII has recently secured orders for two REMUS 300 unmanned underwater vehicles (UUVs) from the U.S. Navy. Delivery of both commercial REMUS 300 UUVs is scheduled for mid-2022.
Importance of the REMUS 300 UUV
The U.S. Navy has been using REMUS UUVs for defense operations and to support critical national security missions for more than 20 years. With improved modularity and maximum payload flexibility, the REMUS UUV is one of the most advanced UUVs in the market.
The primary applications of the REMUS 300 UUV are mine countermeasures (MCM), search and recovery (SAR), rapid environmental assessment (REA), hydrographic survey, marine archaeology, offshore oil and gas, anti-submarine warfare (ASW) and intelligence, surveillance and reconnaissance (ISR).
What Favors Huntington Ingalls?
The United States along with many other nations is strengthening its naval power by upgrading a vast number of UUV’s, submarines and other military ships due to the rising worldwide geopolitical tensions. Against this backdrop, Huntington Ingalls enjoys a dominant position as a Navy contractor in the United States, with growing demand for submarines. In fact, more than 70% of the active U.S. Navy fleet consists of Huntington Ingalls ships and the shipbuilding giant is one of the only two contractors in the world equipped to build nuclear-powered submarines.
Per a report by Markets and Markets, the global unmanned underwater vehicles market is expected to grow from $2 billion in 2020 to $4.4 billion by 2025, at a CAGR of 16.4%. This indicates increased demand for different variants of submarines and their associated services, including the REMUS 300 unmanned underwater vehicles. As UUVs are a vital part of the U.S. Navy fleet, Huntington Ingalls is likely to benefit from such favorable market trends.
Other major manufacturers of unmanned underwater vehicles, such as Lockheed Martin Corporation LMT, Northrop Grumman Corporation NOC, General Dynamics GD, are also expected to benefit from such projections. Per a Markets and Markets report, primarily due to the worldwide pandemic, the demand for UUV has globally plunged but is well on course to recover completely by 2022.
Zacks Rank & Price Movement
In the year-to-date period, shares of Huntington Ingalls, carrying a Zacks Rank #4 (Sell), have gained 26.5% compared with the industry’s 14.5% growth.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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