BWX Technologies: A Leading Nuclear Energy and Defense Play

BWX Technologies is an attractive investment choice in the nuclear energy and defense space due to its strong revenue visibility, accumulation of multibillion-dollar contracts, international prospects, and the parallel strengthening of its medical isotopes business. The company's expertise in nuclear scale, space catalysts, and medical applications signals a buy recommendation.

BWX Technologies (NYSE: BWXT) has emerged as a compelling investment choice in the nuclear energy and defense space, driven by its strong revenue visibility, substantial multibillion-dollar contracts, international prospects, and the parallel strengthening of its medical isotopes business. The company's expertise in nuclear scale, space catalysts, and medical applications signals a buy recommendation.

The stock has shown remarkable resilience, reaching new highs despite challenging conditions such as the pandemic, inflationary pressures, and higher interest rates. From an initial price of $30 in 2015, BWXT has surged to around $189, reflecting a significant 520% increase over the decade. The recent pullback presents an opportunity for re-entry, with the first target at $210, about 30% higher and into new record territory [1].

BWXT's strong suit is the visibility it has secured in its revenues through a massive backlog. The company's ability to lock in multi-year contracts with the US Navy and the National Nuclear Security Administration (NNSA) significantly lowers investment risk. In the second quarter of 2025, BWXT announced a new pricing agreement for reactors worth $2.6 billion, with a duration of up to 8 years. This quarter alone saw over $1 billion in new orders, pushing the Government Operations backlog to $4.4 billion, up 24% in three months and 55% compared to last year [1].

The Special Materials portfolio, which operates in a specialized space with unique licenses and know-how, is another key growth engine. The DUECE program for uranium enrichment has moved into the study phase, and the company is preparing to enter design and pilot plant construction. The demand for high purity de-enriched uranium already exceeds initial expectations, giving BWXT a monopoly-like characteristic in its market [1].

Moreover, BWXT's participation in microreactor projects such as Pele opens an entirely new path. The Department of Defense's emphasis on mobility and reliability aligns with BWXT's focus on safety systems and shielding, making it possible to move radioactive material by land without risk. This work is closely linked to the U.S. plan for an advanced reactor to be in operation by 2028 [1].

In the commercial and medical segments, BWXT has shown impressive growth. The recent acquisition of Kinectrics significantly strengthens its "life of plant" services in the nuclear sector, adding a $240 million backlog and 1,300 employees. In the medical segment, growth is impressive, with double-digit revenue increases thanks to PET diagnostics products and TheraSphere. The outlook for medical isotopes (Tc-99, Lu-177) is highly attractive, as the market is looking for suppliers with scale and reliability [1].

The financial picture confirms that BWXT is delivering results. In the second quarter of 2025, revenues reached $764 million, up 12% year over year, adjusted EBITDA was $146 million, up 16%, with a margin of 19.1%, while EPS rose 24% to $1.02. Free cash flow came in at $126 million, supported by disciplined working capital. Management improved its yearly forecast, pointing to $3.1 billion in sales, EBITDA of $565–575 million, EPS of $3.65–3.75, and free cash flow expected at $275–285 million [1].

While BWXT faces risks such as execution on large government programs, cyclicality in commercial power field services, and development risks in the medical isotope market, the company's strong demand fundamentals and diverse growth engines make it a solid investment choice. The mix of steady government contracts, growth in medical isotopes, and the space angle gives BWXT a unique story that is more than just a standard defense contractor [1].

References:
[1] https://seekingalpha.com/article/4818463-bwx-technologies-nuclear-scale-space-catalysts-medical-upside-buy