BWX Technologies BWXT shares have soared 67.1% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 28.8%. It has also outperformed Zacks Electronics - Miscellaneous Components industry and competitors, including ESAB Corporation ESAB, Baker Hughes Company BKR and Symbotic Inc. SYM.
Over the same time frame, shares of ESAB and Baker Hughes have soared 46% and 26.3%, respectively. Shares of Symbotic have plunged 41.7% year to date.
This outperformance can be firmly attributed to the exceptional growth in its government operations, primarily fuelled by a surge in naval nuclear component production and microreactors. This remarkable growth is further reinforced by significant advancements in its commercial operations, which are generating higher revenues from commercial nuclear components and fuel, along with a substantial increase in medical sales.
Noteworthy to mention, continued growth in design and engineering work executed by its advanced technologies business, particularly in the defense market, has also aided the top-line growth.
BWX Technologies, Inc. Price and Consensus
BWX Technologies, Inc. price-consensus-chart | BWX Technologies, Inc. Quote
Continuous Deal Wins to Aid BWXT’s Prospects
BWX Technologies' strong position in the nuclear technology sector, especially with its government contracts for defense and naval applications may bode well for its near-term prospects. The continuous flow of contracts is driving its growth.
In August 2024, BWXT’s subsidiary, NFS, won a contract from the U.S. Department of Energy’s (DOE’s) National Nuclear Security Administration (NNSA) to develop a centrifuge pilot plant to ensure a domestic supply of enriched uranium for defense purposes.
In July 2024, BWX Technologies partnered with NASA, the military and private industry to develop fuel and components for nuclear-powered spaceships that could be faster and more efficient than spacecraft using traditional chemical rockets. This can be a solid boost for BWXT’s prospects.
In June 2024, BWXT secured two contracts. The first contract was awarded by the DOE/NNSA for the management and operations of the Pantex Plant. The second contract, granted by the Wyoming Energy Authority, involves assessing the feasibility of deploying small-scale nuclear reactors in the state to provide resilient and reliable energy, supplementing the existing power generation resources.
BWXT’s Inorganic Growth Strategy
BWX Technologies is now focusing on acquisitions to expand its product portfolio and expand its market reach. It recently agreed to acquire L3Harris Technologies’ Aerojet Ordnance Tennessee, Inc. (A.O.T.) business for approximately $100 million.
A.O.T. is a top provider of specialty materials, including depleted uranium products. By joining BWXT, A.O.T. will enhance its capabilities in developing advanced materials for commercial, military and space applications.
BWXT’s Bright FY24 Guidance
For 2024, BWXT expects revenues to be $2.7 billion. The figure matched the Zacks Consensus Estimate for revenues, indicating a year-over-year rise of 8%.
Adjusted earnings for the year are expected to be $3.20 per share. The Zacks Consensus Estimate for earnings is pegged at $3.22 per share, up by a couple of pennies over the past 60 days. The figure indicates a year-over-year rise of 7%.
BWXT’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Zacks Rank and Valuation
BWXT shares currently have a stretched valuation, as suggested by a Value Score of D.
BWX Technologies stock is trading with a forward 12-month Price/Sales of 4.13X compared with the industry’s 2.43X.
BWXT currently carries a Zacks Rank #2 (Buy), implying that investors should accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Free: See Our Top Stock And 4 Runners UpBaker Hughes Company (BKR) : Free Stock Analysis Report
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