Jefferies BWX Technologies Breaking Atoms for Breakfast Enabling the Wests Nuclear Capex Initiate Buy 03 September 2026

USA | Critical Minerals Equity Research BWX Technologies September 3, 2026

Breaking Atoms for Breakfast: Enabling the INITIATING COVERAGE

West's Nuclear Capex; Initiate Buy RATING BUY

PRICE $152.29^ BWXT combines operating leverage to the maintenance and expansion of the PRICE TARGET | % TO PT $181.00 | +19% commercial nuclear fleet and a unique position as a sole-source provider of 52W HIGH-LOW $241.82 - $147.74 nuclear reactors and fuels to the U.S. navy, while avoiding direct P&L volatility FLOAT (%) | ADV MM (USD) 99.2% | 151.01 for swings in uranium or enrichment prices. We estimate 2x PEG ratio supports MARKET CAP $14.0B a price target of $181/sh. Initiate with Buy. TICKER BWXT

^Prior trading day's closing price unless otherwise Thesis: BWX Technologies' core business is focused on the design, engineering, and manufacture noted. of precision naval nuclear components, nuclear reactors, and nuclear fuel. BWXT is the sole-source supplier of naval nuclear reactor components and fuel for the U.S. Navy's submarine and carrier FY (Dec) CHANGE TO JEFe JEF vs CONS fleets, with 420+ reactor cores delivered and zero safety incidents. Given the strong nuclear cycle, we expect the company to deliver 6%-7% sales growth and 13%-17% EPS growth through 2030 and, barring a policy shock, most likely through 2040. REV NA NA NM -3%

EPS NA NA NM +3% Key Debates: (1) Pros and cons of a significant part of revenues tied to the U.S. government; (2) HALEU & enrichment project: attractive niche or step into a riskier foray; (3) Medical sale: given the 2026 ($) Q1A Q2A Q3 Q4 FY attractive multiple, focus shifts to realizing proceeds and capital allocation. EPS

PREV Our Take: Two-thirds of sales and three-quarters of EBITDA are directly tied to the government, and the balance is highly regulated. With naval propulsion ~70% of the government business, BWXT has an advantage making its case on commercial projects. Most revenue is generated in long- cycle businesses, with long lags from decisions to revenue. We believe visibility is strong on a Chart 1 - YoY Projected Nuclear Capacity Additions (Cumulative & % of 2025) 12-18 month horizon, and growth capex adds 2%-3% to EPS each year with a 3-5 year lag. With a 4.0% 20%

significant exposure to open-book contracts, the path to earnings surprises is a mix of the timing of 18% 3.5%

milestone payments (we estimate $75-150m swings QoQ are plausible) and better-than-expected 2.5% 14%

productivity (so focus on contract mix and ROIC, not incremental margins). Maintaining a reliable 2.0% 10%

relationship with the government, however, entails being transparent about ongoing investment to 1.0% 6%

address future needs (we estimate 3.5-4.0% of sales), while avoiding potential flag activities such 0.5% 2%

as large buybacks. Our price target implies a 50% premium to the S&P 500, compared to a 10-year

Cumulative Additions % of 2025 Total Capacity (RHS) 2035

. average of 30%. Source: WNA, IAEA, Jefferies

Risks To Our Thesis: (1) Sustained federal budget disruption or reprioritisation which delay Government Operations revenue; (2) Slippage of commercial SMR deployments into the mid-2030s could leave expanded capacity underutilized; (3) Labor shortage could cause schedule overruns; (4) State-actor cyber threats could jeopardize classified contracts; (5) The medical business sale could be delayed, repriced, or blocked by regulators, complicating the capital allocation narrative.

FY (Dec) 2025A 2026E 2027E 2028E Laurence Alexander * | Equity Analyst | Cons. Rev. - 3,804.0 4,169.0 4,475.0 Charles Boakye, CFA * | Equity Analyst Cons. EBITDA - | Cons. EPS Alfonso Sevidal * | Equity Associate Rev. (MM) 3,198.0 3,800.0 4,058.0 4,345.0 |

Please see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 16 - 22 of this report. * Jefferies LLC / Jefferies Research Services, LLC

BWX Technologies Inc (BWXT) Equity Research September 3, 2026

The Long View: BWX Technologies Investment Thesis Risk/Reward - 12 Month View Our investment case for BWX hinges on steady growth from military demand Upside : Downside for nuclear components, and an increase in commercial, nuclear projects.…