Key Points
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Election fears and a nuclear sell-off drove BWX’s stock down.
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The business is as strong as ever, with contracts piling up.
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Management raised the full-year revenue forecast last quarter.
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BWX Technologies (NYSE:BWXT) will report its third-quarter numbers for fiscal year 2026 on Nov. 2, after market close.
BWX builds nuclear reactors, components, and technologies for U.S. Navy submarines and aircraft carriers, and also makes components and microreactors for the commercial nuclear energy industry.
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It is the sole nuclear fuel provider to the U.S. Navy. For decades, this has been a steady business with one demanding customer and no real competition. Yet BWX stock has fallen 40% over the past six months.
What is driving the slide, and could this upcoming earnings report finally trigger a turnaround?
Image source: Getty Images.
Why is BWX stock falling?
BWX stock hasn’t fallen because of weak operational performance or demand. On the contrary, the company has had a strong few months.
In August, management raised its fiscal year 2026 revenue forecast to about $3.8 billion, up nearly 19% from 2025. BWX reported a backlog of $8.4 billion as of June 30.
Contracts continue to flow. Since its last earnings release, BWX won a $189 million contract for naval reactor fuel and signed an agreement with reactor start-up Antares to supply fuel through the end of the decade.
The Army also picked BWX for Janu, its flagship program to deploy small nuclear reactors at military bases so they can keep running even if the power grid goes down. BWX was one of five vendors chosen, and it will build and operate a reactor at Fort Campbell, Kentucky.
BWX also closed a key acquisition this summer. It bought Precision Components Group for about $200 million, gaining access to over 500,000 square feet of nuclear-qualified manufacturing capacity in the U.S. It’s a big move to diversify beyond U.S. defense, and the company’s first step in establishing U.S. commercial manufacturing capacity.
BWX stock has still pulled back sharply from its April 52-week high of $241.82, sliding all the way to a 52-week low of $123.05 on Oct. 23.
Much of that is part of a broader sell-off. Defense stocks have sold off on midterm election jitters, and nuclear stocks have been caught in a steep sell-off driven by worries about artificial intelligence (AI) data center spending.
What to watch in BWX’s earnings, and what to do with the stock
Let me warn you. Management already said nearly 55% of second-half earnings will be generated in the fourth quarter, so Q3 could look lighter. But those will just be the headline numbers.
The more important numbers are the full-year and long-term guidance. At its latest Investor Day, management reaffirmed its 2026 guidance and set a 2030 revenue target of $5.5 billion to $6 billion. To reach that goal, it expects to top up its backlog and predictable contract wins with newer growth avenues, such as naval propulsion and nuclear, as well as acquisitions.
BWX’s commercial business, which makes heavy steam generators and reactor pressure vessels for nuclear power plants, accounts for about 30% of revenue and is growing rapidly. Watch out for its margins.
Ultimately, remember that BWX is a long-term growth story with a deep moat. Defense spending is rising, and the commercial nuclear sector is booming amid demand for AI. The Navy’s latest 30-year shipbuilding plan calls for procuring two Virginia-class submarines and one Columbia-class submarine annually, which gives BWX decades — not just years — of visibility.
The stock’s drop has come mostly from election fears and a cooling mood around nuclear stocks. None of that changes the long-term thesis for BWX Technologies, and that’s what should drive your buy or sell decisions when the company announces earnings.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BWX Technologies. The Motley Fool has a disclosure policy.
