Core Viewpoint - BWX Technologies, Inc. (BWXT) is expected to report its fourth-quarter 2024 results on February 24, with earnings estimated at 82 cents per share, reflecting an 18.8% decline year-over-year, while revenues are projected to increase by 1.7% to $738 million [1][2]. Group 1: Earnings and Revenue Estimates - The Zacks Consensus Estimate for BWXT's fourth-quarter earnings is 82 cents per share, indicating an 18.8% decline from the same quarter last year, with no change in estimates over the past 60 days [2]. - Revenue estimates for the fourth quarter are pegged at $738 million, suggesting a 1.7% increase compared to the previous year [2]. - BWXT has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 9.1% [2]. Group 2: Factors Influencing Performance - The fourth-quarter performance is likely to benefit from strong demand in global security, clean energy, and medical markets, particularly in nuclear power [3]. - BWXT's strong position in the nuclear technology sector, especially with government contracts for defense and naval applications, is expected to drive growth [4]. - Ongoing defense-related projects, such as Pele and DRACO, are anticipated to contribute positively to the company's growth in the fourth quarter [4]. - The naval nuclear propulsion business, along with growth in microreactors and technical services, is expected to enhance fourth-quarter performance [5]. - Strength in the diagnostics portfolio and expansion in cancer therapeutics, including a partnership with North Star for radium-226 processing, may further boost sales [6]. Group 3: Challenges and Headwinds - The shutdown of the Navy Fuel processing facility and the U-metal construction project due to flooding and power outages for three weeks may offset some positive factors [7]. - Macroeconomic challenges and geopolitical tensions are also expected to negatively impact BWXT's fourth-quarter performance [7]. Group 4: Earnings Prediction Model - The current model does not predict a definitive earnings beat for BWX Technologies, as it has a Zacks Rank of 2 but an Earnings ESP of 0.00% [8].

Group 1 - The focus is on small to mid-cap companies with disruptive technology, emphasizing competitive analysis and research on founders and their previous endeavors [1] - The investment strategy involves a two-year time frame, with a tendency to hold investments for longer periods [1] - The analyst has a family history of investing, learning from past market downturns, and emphasizes the importance of choosing winners and cutting losses early [1] Group 2 - The current investment focus is on the electrification of various sectors, indicating a trend towards sustainable and innovative technologies [1] - The analyst has a background in accounting and company valuation, enhancing the credibility of the research and analysis conducted [1] - The analyst's experience includes trading through significant market events such as the dot-com bubble and the credit crisis, providing a robust understanding of market dynamics [1]

AI Infrastructure and Investment - President Donald Trump unveiled a joint venture called "Stargate" with OpenAI, Oracle Corp, and Softbank to create AI infrastructure, including data centers in the United States, with an initial investment of $100 billion, potentially reaching $500 billion in the next four years [1] - Microsoft plans to invest $80 billion in 2025 into AI-enabled data centers to train AI models and deploy AI and cloud-based applications [3] - Bloomberg Intelligence estimates generative AI spending will increase from $67 billion in 2023 to $1.3 trillion by 2032, with UBS predicting a 33.5% year-over-year increase in capital expenditure on AI applications by four U.S. technology giants in 2025 [5] Nuclear Energy and Data Centers - The energy-hungry AI space has made nuclear energy one of the hottest industries on Wall Street, with companies like Microsoft, Alphabet, Meta, and Amazon collaborating with nuclear energy producers to meet the massive electricity demand for data centers [2][4] - Rystad Energy predicts that the combined expansion of traditional and AI-driven data centers, along with chip foundries, will increase U.S. electric power demand by 177 TWh from 2023 to 2030, reaching a total of 307 TWh [6] - The U.S. Department of Energy reported that data center energy usage will "double or triple by 2028," after doubling over the past decade [6] Nuclear Energy Stocks - Constellation Energy Corp (CEG) is a leading U.S. energy company focusing on clean energy, particularly nuclear energy, with a $5.1 billion capital expenditure plan through 2025 to acquire nuclear fuel and increase inventory levels [8] - BWX Technologies Inc (BWXT) manufactures and sells nuclear components, with expected revenue and earnings growth rates of 9.9% and 5.9%, respectively, for the current year [11][12] - Dominion Energy Inc (D) is realigning its portfolio to focus on regulated assets, aiming for net-zero carbon and methane emissions by 2050, with expected revenue and earnings growth rates of 9.5% and 22.7%, respectively, for the current year [15][17] - Talen Energy Corp (TLN) is an independent power producer operating nuclear, fossil, solar, and coal power plants, with an expected revenue growth rate of 18.6% for the current year [18][19] - PG&E Corp (PCG) generates electricity using nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic sources, with expected revenue and earnings growth rates of 5.5% and 9.4%, respectively, for the current year [21][23] Strategic Partnerships and Agreements - Microsoft entered into a 20-year agreement with Constellation Energy to revive the Three Mile Island nuclear plant in Pennsylvania, with a $1.6 billion investment to provide carbon-free electricity for Microsoft's data centers [9] - Dominion Energy signed an MOU with Amazon to explore innovative development structures for enhancing potential Small Modular Reactor (SMR) nuclear development in Virginia [16] - Amazon has partnered with Talen Energy in Pennsylvania to power its data centers with nuclear energy [18]

Core Viewpoint - BWX Technologies (BWXT) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to significant price movements when estimates are revised [3]. Business Improvement Indicators - The increase in earnings estimates for BWX indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - For the fiscal year ending December 2024, BWX is projected to earn $3.23 per share, reflecting a 7% increase from the previous year, with a 1.5% rise in the Zacks Consensus Estimate over the past three months [7]. Zacks Rank System Overview - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The system maintains a balanced distribution of ratings, ensuring that only the top 20% of stocks receive a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions [8][9].

Nuclear Energy Theme - The nuclear energy theme is viewed as a clean and cheap energy source driven by decarbonization and climate change, particularly in the context of air conditioning (AC) and electric vehicles (EVs) [1] - The nuclear energy theme is considered the best option among energy sources due to its alignment with decarbonization goals and climate change mitigation [1] Analyst's Experience and Perspective - The analyst has over 30 years of experience analyzing diverse industries including airlines, oil, retail, mining, fintech, and ecommerce, as well as macro, monetary, and political drivers [1] - The analyst has lived through multiple crises such as the Tequila Crisis, Asian Financial Crisis, Dotcom Bubble, 9/11, the Great Recession, and the COVID-19 pandemic, which provides a broad base of experience applicable across multiple disciplines [1] - The analyst has also engaged in entrepreneurial ventures in export, factoring, and printing, further enriching their understanding of business models and innovation [1]

Core Viewpoint - BWX Technologies (BWXT) has shown strong performance in the stock market, significantly outperforming its industry peers and reflecting investor optimism due to consistent strong quarterly results and strategic growth initiatives [1][2]. Group 1: Stock Performance - BWXT shares have returned 17% over the trailing six months, outperforming the Zacks Computer & Technology appreciation of 2.4% and the Zacks Electronics - Miscellaneous Components industry's decline of 5.5% [1]. - Competitors such as SPX Technologies, nVent Electric, and Symbotic Inc. have underperformed, with returns of 2%, -11.5%, and -30.1% respectively [1]. Group 2: Financial Performance - BWXT has consistently exceeded Zacks Consensus Estimates for both revenue and earnings over the past four quarters, indicating strong operational performance [2]. - For FY24, BWXT anticipates revenues of $2.7 billion, reflecting an 8.02% year-over-year increase, and adjusted earnings of $3.20 per share, which indicates a 6.95% year-over-year rise [6]. Group 3: Strategic Initiatives - In November 2024, BWXT announced the acquisition of Aerojet Ordnance Tennessee to enhance its special materials portfolio for defense applications [3]. - A partnership with Westinghouse Electric Company was established to collaborate on AP1000 and AP300 projects, aimed at expanding the supply of carbon-free energy globally [4]. - BWXT secured a $3 billion contract from the U.S. Department of Energy for cleanup operations at the West Valley Demonstration Project, showcasing its commitment to environmental remediation [4]. - In June 2024, BWXT obtained a $20 million contract with the Wyoming Energy Authority to evaluate small-scale nuclear reactor deployment, expected to conclude by Q3 2025 [5]. Group 4: Earnings Surprises - The company has achieved an average earnings surprise of 9.14% over the trailing four quarters, indicating strong performance relative to market expectations [7].

Core Viewpoint - BWX Technologies is experiencing significant growth driven by its government operations, particularly in naval nuclear components and microreactors, alongside strong performance in commercial operations and medical sales [1]. Group 1: Financial Performance - Adjusted earnings for FY24 are expected to be $3.20 per share, reflecting a year-over-year increase of 7% [4]. - BWX Technologies anticipates revenues of $2.7 billion for 2024, indicating an 8% year-over-year increase, consistent with Zacks Consensus Estimate [9]. - The company has consistently beaten the Zacks Consensus Estimate for earnings in the past four quarters, with an average surprise of 9.1% [10]. Group 2: Market Position and Growth Drivers - BWX Technologies holds a strong position in the nuclear technology sector, particularly with government contracts for defense and naval applications, which are driving its growth [2]. - The company is expanding its engineering and design work in advanced technologies, especially in the defense market, contributing to top-line growth [6]. - A joint venture led by BWX Technologies received a $3 billion cleanup contract from the U.S. Department of Energy, with a 10-year ordering period [7]. Group 3: Strategic Initiatives - BWX Technologies is focusing on partnerships and acquisitions to enhance its portfolio and global presence, including a partnership with Westinghouse Electric Company for nuclear projects [3]. - The company signed an agreement to acquire L3Harris' Aerojet Ordnance Tennessee business for approximately $100 million, which will enable the development of advanced materials for various applications [8]. Group 4: Stock Performance - BWX Technologies' shares have increased by 47.1% over the past year, outperforming the broader Zacks Computer and Technology sector's return of 32.4% [13]. - The stock is currently trading at a forward 12-month Price/Sales ratio of 3.63X, compared to the industry's 2.49X, reflecting a premium justified by strong growth prospects [5].

Core Viewpoint - Nidec Corp. (NJDCY) is currently viewed as a better value opportunity compared to BWX Technologies (BWXT) based on various valuation metrics and earnings outlooks [1]. Valuation Metrics - Both NJDCY and BWXT have a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and an improving earnings outlook for both companies [3]. - NJDCY has a forward P/E ratio of 15.86, significantly lower than BWXT's forward P/E of 37.96, suggesting NJDCY is undervalued relative to BWXT [5]. - The PEG ratio for NJDCY is 0.47, indicating a favorable valuation when considering expected earnings growth, while BWXT's PEG ratio is much higher at 4.11 [5]. - NJDCY's P/B ratio stands at 4.03, compared to BWXT's P/B of 10.59, further supporting the notion that NJDCY is the more attractive value option [6]. Value Grades - NJDCY has a Value grade of B, while BWXT has a Value grade of D, highlighting the relative undervaluation of NJDCY compared to BWXT [7].

Core Insights - Nidec Corp. (NJDCY) and BWX Technologies (BWXT) are both attractive options for value investors, with a current Zacks Rank of 2 (Buy) indicating positive earnings estimate revisions for both companies [3][7] Valuation Metrics - NJDCY has a forward P/E ratio of 15.65, significantly lower than BWXT's forward P/E of 40.96, suggesting NJDCY may be undervalued [5] - The PEG ratio for NJDCY is 0.47, indicating a favorable valuation relative to its expected earnings growth, while BWXT's PEG ratio is much higher at 4.44 [5] - NJDCY's P/B ratio stands at 3.97, compared to BWXT's P/B of 11.43, further supporting the notion that NJDCY is the more attractive value option [6] Value Grades - Based on various valuation metrics, NJDCY has a Value grade of B, while BWXT has a Value grade of D, indicating that NJDCY is currently the superior value investment [7]

For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Has BWX Technologies (BWXT) been one of those stocks this year? By taking a look at the stock's year-to-date performance in comparison to its Computer and Technology peers, we might be able to answer that question.BWX Technologies is one of 619 individual stocks in the Computer and Technology sector. Collectively, these companies sit at #2 in the Zacks Secto ...