UPDATE: Bank Of America Upgrades Huntington Ingalls Industries

Analysts at Bank of America on Tuesday upgraded Huntington Ingalls Industries Inc HII from Neutral to Buy and set a $130 price target. Huntington designs, builds and maintains ships, including ships with nuclear capabilities, for the U.S. Navy and Coast Guard.

Bank of America cited Huntington’s use of its strong free cash flow to pay down debt as a reason for the upgrade.

Huntington’s relatively high debt to equity ratio of 1.05 is one of the only blemishes on the stock, as many of its other fundamental metrics are at appealing levels. Huntington’s forward price-to-earnings ratio of 13.24, its price-to-earning-to-growth ratio (PEG) of 0.66, and its price-to-free cash flow (P/FCF) of 12.6 all indicate that the stock is a good value at its current price.

Upside Potential

Huntington stock closed up more than 3.6 percent at $114.28. Bank of America’s $130 price target represents about a 15 percent upside for the stock from current levels. Over the past year, Huntington stock is up more than 25 percent.

Other Analyst Action

Deutsche Bank on Monday raised its price target for Huntington stock from $125 to $137. Last week, Citigroup issued a Buy rating on Huntington and raised its price target from $141 to $150.