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Babcock & Wilcox Upped to Strong Buy - Analyst Blog
Zacks Investment Research upgraded The Babcock & Wilcox Company ( BWC ) to a Zacks Rank #1 (Strong Buy) on March 12, 2013.
Why the Upgrade?
Operating environment and future growth prospects seem bright for The Babcock & Wilcox Company as earnings estimates for this diversified machinery company are on the rise. Over the last 30 days, the Zacks Consensus Estimate for 2013 has increased by 6.1% to $2.27 while that for 2014 went up 8.3% to $2.49.
Momentum has been strong after Babcock & Wilcox released its fourth quarter results and year 2012 earnings results on February 27. Adjusted earnings per share of 45 cents surpassed the Zacks Consensus Estimate of 42 cents by 7.1% while lagging behind the year-ago earnings of 54 cents. Results for 2012 were impressive with earnings per share of $1.75 far exceeding $1.43 earned in 2011.
Revenue for the quarter increased 8.1% year over year on the back of healthy performances at the company's Power Generation and Nuclear Operations segments. Contract wins are solid for Babcock & Wilcox with the recent ones including $510 million worth Naval Nuclear Component contract, $100 million worth of contract for U.K., Waste-to-Energy Plant and $100 million worth Naval Nuclear Fuel Services and Materials contracts, among others.
For 2013, management of The Babcock & Wilcox Company targets to generate revenue within $3.40-$3.55 billion range and adjusted earnings per share in the range of $2.25-$2.45. Also, cost savings up to $10-$15 million from the company's Global Competitiveness Initiative are expected to be realized in 2013.
Other Stocks to Consider
Other stocks worth a look in the industry are Atlas Copco AB ( AIMC ) and EnPro Industries, Inc. ( NPO ), each with a Zacks Rank #1 (Strong Buy) and Blount International Inc. ( BLT ), carrying a Zacks Rank #2 (Buy).
ALTRA HOLDINGS (AIMC): Free Stock Analysis Report
BLOUNT INTL (BLT): Free Stock Analysis Report
BABCOCK&WILCOX (BWC): Free Stock Analysis Report
ENPRO INDUS INC (NPO): Free Stock Analysis Report
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Zacks Investment Research