BWX Technologies BWXT shares have gained 19.7% in the year-to-date period, outperforming the 7.9% growth of the Zacks Aerospace-Defense Equipment industry. It also beat the Zacks Aerospace sector’s growth of 0.2% and the S&P 500’s gain of 9%.
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Other aerospace-defense equipment stocks, such as AAR Corporation AIR and Curtiss-Wright CW, have also outperformed the industry in the year-to-date period. Shares of AIR have gained 43.5%, while shares of CW surged 32.5%.
While BWXT’s recent performance may prompt some investors to quickly consider adding the stock to their portfolio, it is important to look closely at the factors driving this growth. The key question is whether the company can sustain this momentum or if certain risks may affect its future performance. Evaluating these aspects can help investors make a more informed decision.
Tailwinds for BWXT
BWX Technologies is benefiting from growing global demand for nuclear power and increased military spending, which is driving strong business growth. At the same time, governments are investing heavily in defense modernization programs, including nuclear-powered submarines and naval reactors, where BWXT is a major supplier. These trends helped the company deliver strong financial performance in early 2026 and build an $8.7 billion backlog, providing strong revenue visibility for the years ahead.
BWXT’s growth prospects are supported by strong financial performance and steady contract wins. In May 2026, BWXT released its first-quarter 2026 results, reporting net revenues of $860.2 million, which reflected a 26.1% year-over-year increase. Adjusted earnings per share rose 23.1% to $1.12. The strong quarterly performance highlights healthy demand across its business segments and efficient execution of ongoing programs.
The company also continues to strengthen its position in the defense market through major contract awards. In May 2026, BWXT secured U.S. Naval Nuclear Propulsion Program contracts worth more than $1.4 billion. These include a $1.29 billion contract for long-lead material procurement through fiscal 2026, along with a $165 million contract related to reactor system components and manufacturing work for the Ford-class aircraft carrier program. Such contract wins are expected to support revenue visibility and long-term growth.
BWXT’s Near-Term Estimates
The Zacks Consensus Estimate for BWXT’s 2026 revenues indicates a solid improvement of 17.8% from the prior-year level. The estimate for its 2026 earnings also indicates an improvement of 16.5% from the prior-year level.
The Zacks Consensus Estimate for BWXT’s 2027 revenues and earnings also indicates a similar improvement.
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Further, the upward revision in its 2026 and 2027 earnings estimates over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.
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BWXT Shares Trading at a Discount
BWXT shares are trading at a discount, with its forward 12-month Price/Sales (P/S F12M) being 4.87X compared with its industry’s average of 12.09X.
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AAR is trading at a P/S F12M of 1.32X, while Curtiss-Wright is trading at a P/S F12M of 7.01X.
BWXT’s ROE
Return on Equity (ROE) measures how effectively a company uses shareholders’ equity to generate profits. BWXT currently has an ROE of 31.33%, which is above the industry average of 12.99%. This indicates that, compared with its industry, the company is generating higher returns on its equity.
Liquidity Position of BWXT
BWXT has a current ratio of 2.40. The ratio, being more than one, indicates that BWXT possesses sufficient capital to pay off its short-term debt obligations.
Its industry peers, AAR and Curtiss-Wright, also maintain current ratios above one. AIR has a current ratio of 2.70, while CW holds 1.52.
Conclusion
BWX Technologies remains well-positioned for long-term growth, supported by steady demand for its defense products, improving operational performance and healthy profitability. The company continues to benefit from rising revenue and earnings expectations, along with positive earnings estimate revisions that reflect confidence in its future growth prospects.
Existing investors may consider retaining their positions given BWXT’s solid fundamentals and strong return on equity. However, investors interested in the stock may prefer to wait for a more attractive entry point before building exposure to the aerospace and defense equipment sector.
BWXT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).