BWX Technologies (BWXT): Assessing Valuation After Kozloduy Expansion Win and Project Pele TRISO Fuel Progress

BWX Technologies (BWXT) just doubled down on its nuclear credentials by landing a decade-long Owner's Engineer role for Bulgaria's Kozloduy expansion while advancing TRISO fuel deliveries for the U.S. Army's Project Pele microreactor.

See our latest analysis for BWX Technologies.

Those nuclear wins come after a strong run, with the share price at $174.71 and a robust year to date share price return of 56.72 percent, while the five year total shareholder return of 206.39 percent signals sustained momentum rather than a short lived pop.

If BWX Technologies has you rethinking nuclear and defense exposure, it could be worth exploring aerospace and defense stocks as a way to spot other resilient names riding similar long term spending tailwinds.

After a multi year rally and double digit earnings growth, BWX Technologies now trades at a premium that assumes nuclear demand will keep compounding. Is this still an entry point, or is future growth already fully priced in?

Most Popular Narrative: 20.6% Undervalued

With BWX Technologies last closing at $174.71 against a narrative fair value of $220, some investors see meaningful upside still on the table.

I believe that profit margin growth will be slower in the short-term as BWXT has spent $625 million over the last year acquiring L3 Harris’s A.O.T (Aerojet Ordinance Tennessee) team and Kinectrics Inc, a Canadian leader in power plant support systems including CANDU reactors and a supplier and producer of isotopes for the radiopharmeceutial industry. BWXT has said that both acquisitions would be integrating into their company and taking on all debt and retaining all employees from each company.

Read the complete narrative.

According to clillz, this valuation leans on ambitious revenue expansion, steady margin improvement and a future earnings multiple more often reserved for faster growing sectors. Want to see how those moving parts combine into that punchy fair value estimate and what assumptions carry the most weight over the next decade? Read on to unpack the full narrative behind the number.

Result: Fair Value of $220.0 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, any meaningful pullback in US defense or nuclear funding, or renewed regulatory skepticism toward reactors, could quickly challenge clillz’s long term assumptions.

Find out about the key risks to this BWX Technologies narrative.

Another View: Rich on Earnings Multiples

While the popular narrative sees BWX Technologies as about 20.6 percent undervalued, the earnings multiple tells a very different story. At roughly 52 times earnings, the stock trades well above the US Aerospace and Defense average of 37.4 times and the peer average of 34.3 times. It is also further above a fair ratio of 30.4 times that the market could eventually converge toward.

That gap suggests limited margin for error, as even a modest rerating toward sector norms or the fair ratio could eat into returns, especially if growth or margins stumble. Are investors being paid enough for taking that valuation risk?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own BWX Technologies Narrative

If you see the story differently or want to stress test the numbers yourself, you can build a custom view in just minutes, Do it your way.

A great starting point for your BWX Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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