Nuclear solutions provider BWX Technologies has been awarded a $28 million contract from the Strategic Capabilities Office (SCO) for designing a prototype of a transportable microreactor. This 12 month contract falls under the second phase of SCO’s Project Pele initiative.
BWX Technologies’ (BWXT) President of Nuclear Services Group, Ken Camplin said, “We believe that our innovative designs, combined with our existential licensed facilities and manufacturing capabilities, set BWXT apart in the microreactor market.”
Camplin further added, “Our engineering capabilities are ideally suited for projects like this that require pairing first-of-a-kind technological solutions with proven production techniques to develop a fresh option for meeting power generation needs.”
This portable microreactor can address the energy needs for the various operational requirements of the Department of Defense.
Furthermore, it makes the Department of Defense’s facilities less vulnerable to an electric grid attack while simultaneously streamlining logistics and delivery to forward operating bases. (See BWX Technologies stock analysis on TipRanks)
Last month, Maxim Group analyst Tate Sullivan reiterated a Buy rating on the stock and maintained a price target of $75 (16.7% upside potential). Commenting on the company’s 4Q performance, Sullivan said, “Our $75 price target is based on 21x our 2022 EPS estimate of $3.53. Our P/E multiple target of 21x is a premium to our peer group’s 18x average multiple due to BWXT’s formidable barriers to entry and sustainable demand from the U.S. navy for nuclear reactors for submarines.”
Sullivan further added, “We maintain our Buy rating based on our outlook for BWXT to continue to grow earnings through economic cycles from multiple nuclear-related businesses that we believe have limited competition.”
Turning to rest of the Street, the stock has a Moderate Buy consensus rating alongside an average analyst price target of $70.50 (9.7% upside potential) based on 2 Buys, 1 Hold and 1 Sell. Shares have rallied 43.6% over the past year.
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