DA Davidson holds Babcock & Wilcox stock at $1 target, Neutral rating

Published 13/05/2025, 22:14
DA Davidson holds Babcock & Wilcox stock at $1 target, Neutral rating

On Tuesday, DA Davidson maintained a Neutral rating on Babcock & Wilcox Enterprises (NYSE:BW) with a price target of $1.00. The firm’s analysis focused on the company’s ongoing efforts to improve its financial position through refinancing and extending debt maturities. The research firm acknowledged that successful refinancing could be a positive driver for the company’s stock, given its current valuation.

Brent Thielman of DA Davidson commented on the company’s strategic moves to address its capital structure, noting the potential for these actions to catalyze the stock price. However, he also pointed out the need to keep an eye on the effects of global trade and tariff discussions, which could disrupt supply chains or lead to project delays for Babcock & Wilcox (NYSE:BWXT).

The firm highlighted that while there is a growing demand for power, which Babcock & Wilcox is positioned to meet, the priority remains on the company’s progress in restructuring its finances. The emphasis is on how Babcock & Wilcox navigates its capital structure and refinancing efforts in the near term.

Babcock & Wilcox Enterprises specializes in energy and environmental technologies and services for the power and industrial markets. The company’s focus on addressing its capital structure comes at a time when the global energy sector is facing various challenges, including trade uncertainties that could influence operations.

DA Davidson’s reiteration of the Neutral rating and $1.00 price target reflects a cautious but watchful stance on Babcock & Wilcox’s stock as the company works through its financial strategies amidst a complex global trade environment.

In other recent news, Babcock & Wilcox Enterprises Inc. reported its Q1 2025 earnings, showing a substantial revenue increase to $181.2 million, surpassing the forecast of $159.9 million. Despite the revenue growth, the company reported a larger-than-expected loss per share of $0.26, missing the forecasted loss of $0.14. The company also highlighted strong growth in backlog and bookings, which suggests robust demand for its technologies and services. Babcock & Wilcox is progressing with its BrightLoop hydrogen technology project, with production expected by mid-2026. Additionally, the company announced a significant reduction in its outstanding debt through a bond exchange, which is expected to decrease annual interest expenses. The firm continues to explore further debt refinancing options and asset sales to improve its financial position. Analyst firm Craig Hallum inquired about the company’s guidance and tariff impacts, to which the company reiterated its current guidance and expressed caution regarding potential tariff effects on future projects. Babcock & Wilcox also reported strong performance in its parts and services business, contributing to the positive results in the first quarter.

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