Based on BWX Technologies, Inc.'s (NYSE:BWXT) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 8.2% in the upcoming year against the past 5-year average growth rate of -0.7%. Presently, with latest-twelve-month earnings at US$227m, we should see this growing to US$246m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from BWX Technologies in the longer term?
The view from 7 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for BWXT, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$227m and the final forecast of US$285m by 2022, the annual rate of growth for BWXT’s earnings is 8.1%. EPS reaches $2.94 in the final year of forecast compared to the current $2.29 EPS today. With a current profit margin of 13%, this movement will result in a margin of 13% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For BWX Technologies, I've compiled three pertinent aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is BWX Technologies worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BWX Technologies is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of BWX Technologies? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.