Jefferies initiated coverage of BWX Technologies Inc. with a buy rating, citing the company’s dominant position in U.S. naval nuclear components and expanding defense contracts.
The brokerage set a $181 price target against a current share price of $155.67, implying roughly 16% upside. Jefferies estimated a price-to-earnings-growth ratio of 2.0x to support the valuation, compared with a current PEG of 1.98x. Revenue growth is projected at 6-7% annually through 2030, with earnings per share growth estimated at 13-17% over the same period, driven by sustained demand in the nuclear cycle.
BWX Technologies serves as the sole-source supplier of nuclear reactors, precision components, and nuclear fuel to the U.S. Navy’s submarine and carrier fleets. The company has delivered more than 420 reactor cores with no safety incidents, reinforcing its long-term contracts. BWX also secured a role in the U.S. Army’s Janus program, with plans to deploy its Advanced Nuclear Reactor technology at Fort Campbell, Kentucky.
Second-quarter adjusted earnings per share reached $1.07, exceeding Wall Street’s $1.05 estimate, though revenue of $901.6 million fell short of the $905.4 million forecast. Year-over-year revenue rose 18%. Full-year free cash flow guidance was raised to a range of $345 million to $360 million, while the backlog expanded to $8.4 billion, up 40% from the prior year.
Jefferies’ outlook extends through 2040, contingent on stable policy conditions. The initiation follows a recent upgrade by Wells Fargo, which moved BWX from underweight to equal weight.
