There’s been a notable change in appetite for BWX Technologies, Inc. (NYSE:BWXT) shares in the week since its full-year report, with the stock down 13% to US$60.76. It was a credible result overall, with revenues of US$1.9b and statutory earnings per share of US$2.55 both in line with analyst estimates, showing that BWX Technologies is executing in line with expectations. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for BWX Technologies
After the latest results, the five analysts covering BWX Technologies are now predicting revenues of US$2.04b in 2020. If met, this would reflect an okay 7.7% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to accumulate 9.0% to US$2.79. Before this earnings report, analysts had been forecasting revenues of US$2.05b and earnings per share (EPS) of US$2.74 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$67.17, suggesting that the company has met expectations in its recent result. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on BWX Technologies, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$60.00 per share. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It’s clear from the latest estimates that BWX Technologies’s rate of growth is expected to accelerate meaningfully, with forecast 7.7% revenue growth noticeably faster than its historical growth of 6.2%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 6.4% next year. Factoring in the forecast acceleration in revenue, it’s pretty clear that BWX Technologies is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn’t be too quick to come to a conclusion on BWX Technologies. Long-term earnings power is much more important than next year’s profits. We have forecasts for BWX Technologies going out to 2023, and you can see them free on our platform here.
You can also see whether BWX Technologies is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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