BWX Technologies ' nuclear portfolio could expand from the Earth's high seas to outer space, according to Bank of America. BWXT, originally Babcock & Wilcox until a 2015 restructuring, is best known for supplying the U.S. Navy with nuclear reactors for submarines and aircraft carriers. The company also makes parts for the U.S. civilian nuclear fleet in the U.S. Business in both areas is strong, leading Bank of America to increase its stock price target for BWXT by 42%, to $220 per share from $155 previously, implying 22% upside from current levels. But BWXT has a more speculative area of opportunity — the moon. "BWXT could benefit from NASA's recently announced plans to develop lunar surface nuclear power technology by 2030, expanding the space opportunity set," Bank of America analyst Ronald Epstein told clients in a note Wednesday. NASA plans to use micro nuclear reactors for its lunar power plant. BWXT is designing a transportable microreactor called Pele that could play a role, and is currently building a 1.5 megawatt demonstration reactor for the Defense Department. BWXT is also positioned to act as a key component supplier for small modular nuclear reactors if the U.S. ramps up construction of these facilities, according to Bank of America. President Donald Trump signed an order in May calling for the Nuclear Regulatory Commission to approve SMRs at high volume. "Accelerating development of small modular reactors (SMRs) provides upside to BWXT's Commercial business given its enviable position as a critical merchant supplier," Epstein said. Meanwhile, BWXT's underlying business is also strong, with the Navy recently ordering $2.6 billion of nuclear reactors and components for its Virginia and Columbia class submarines as well as Ford class aircraft carriers. The Navy order will boost BWXT's revenue certainty over a six- to eight-year delivery period, according to Bank of America. "BWXT [is] uniquely positioned to support deployment of military and space nuclear power," Epstein said.
