Babcock & Wilcox shares surged 8.52% pre-market on $40 million Canadian refinery contract.

Babcock & Wilcox shares surged 8.52% in pre-market trading on Dec. 26, 2025, fueled by a $40 million contract for its Wet Gas Scrubbing technology at a Canadian refinery, signaling renewed demand for its environmental solutions.

The contract win follows a strong Q3 performance, including $35.1 million in net income and a $26 million senior debt redemption, highlighting improved liquidity and profitability. The firm’s SolveBright carbon capture system is gaining traction in the U.S., aligning with decarbonization trends, though scaling remains capital-intensive.

Analysts note that while near-term balance sheet strength supports optimism, long-term success hinges on expanding decarbonization technologies amid high operational costs and regulatory uncertainties. The recent pre-market rally reflects investor confidence in the company’s strategic positioning within the evolving clean energy sector.

With the company's recent debt reduction and contract win, the focus remains on whether the firm can sustain profitability while navigating capital expenditures for scaling its carbon capture solutions. A key challenge will be maintaining this momentum while managing regulatory and technological hurdles in the carbon capture space.