BWXT Poised For Best-In-Class Results: Analyst Foresees Growth From Microreactors And High-Margin Medical Rev

Truist Securities analyst Michael Ciarmoli reiterated a Buy rating on BWX Technologies, Inc. BWXT, raising the price target to $83 from $77.

Ciarmoli believes that the combination of numerous revenue growth drivers, monopolistic market positions, elevated visibility, a resurgence in the commercial nuclear market, and a sharp focus on execution by management will enable BWXT to post best-in-class results among its peers over the next 12-36 months.

The analyst sees signs of microreactor adoption in the commercial market and anticipates that the high-margin medical rev growth acceleration will complement stability in the company's core naval defense market.

The analyst adds that management is now looking to optimize and manage working capital to cut its working capital days by 1.5 per year. 

Ciarmoli applauds BWXT's refreshed leadership team, where CEO Geveden's execution and improved strategic decision-making ensure that the right people are in the right seats to drive profitable growth.

With plenty of investments already being made, the management team is taking a pause and pivoting its attention to its processes to ensure the captured growth opportunities can adequately drive financial performance and increase shareholder value through flawless execution.

The broader deployment of the company's digital transformation and artificial intelligence tools will likely help streamline operations and improve productivity and quality.

At the same time, various cross-cutting initiatives and other IT initiatives should also be additive, Ciarmoli adds.

Price Action: BWXT shares are trading higher by 0.84% to $74.07 on the last check Monday.