On Thursday, Lake Street Capital Markets adjusted its price target for Babcock & Wilcox Enterprises (NYSE:BW), a global leader in energy and environmental technologies and services for the power and industrial markets, to $8.00 from the previous $11.00. Despite the reduction, the firm maintains a Buy rating on the company's shares.
The revision comes amidst a period of strategic transformation for Babcock & Wilcox Enterprises. The company has been actively pursuing new contracts and enhancing its business outlook. The analyst at Lake Street Capital Markets highlighted the company's progress in shifting its focus towards higher-margin sales and services, moving away from large projects that traditionally carried higher risks and lower margins.
The recent announcement of a $50 million at-the-market (ATM) offering is expected to provide Babcock & Wilcox with additional working capital, which is seen as a positive step given the previously stretched state of the company's balance sheet. This move is anticipated to support the company's strategic initiatives.
Market activity for Babcock & Wilcox remains robust, with the company boasting a sales pipeline of $9 billion. There is also a specific goal to secure $1 billion in orders for its BrightLoop system by the year 2028. The analyst expressed optimism about the company's ability to convert its sales pipeline into tangible results.
Additionally, Babcock & Wilcox is making headway in its ClimateBright H2 generation and CO2 capture businesses. The firm anticipates that early progress with a small system within this year could act as a catalyst for the company's stock. The analyst's commentary reflects confidence in Babcock & Wilcox's continued traction in its strategic endeavors and its potential for future growth.
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