- Babcock & Wilcox (BW) has surged nearly 700% over the past year, hitting a new 5-year high of $10.97.
- BW has a 100% “Buy” Barchart opinion.
- Despite technical strength, earnings and revenue are projected to decline this year.
- Morningstar warns BW is 79% overvalued with weak financial health, suggesting caution for risk-averse investors.
Today’s Featured Stock
Valued at $1.16 billion, Babcock & Wilcox (BW) offers energy technology and services primarily for the nuclear, fossil, and renewable power markets.
What I’m Watching
I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. BW checks those boxes. Since the Trend Seeker issued a new “Buy” on Jan. 8, shares are up 27.52%.
Barchart Technical Indicators for Babcock & Wilcox
Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.
Babcock & Wilcox scored a new 5-Year high of $10.97 on Jan. 28.
- BW has a Weighted Alpha of +384.64.
- Babcock has a 100% “Buy” opinion from Barchart.
- The stock has gained 684.68% over the past 52 weeks.
- BW has its Trend Seeker “Buy” signal intact.
- The stock recently traded at $9.89 with a 50-day moving average of $6.79.
- Babcock has made 15 new highs and is up 75.63% over the past month.
- Relative Strength Index (RSI) is at 70.34.
- There’s a technical support level around $10.05.
Don’t Forget the Fundamentals
- $1.16 billion market capitalization.
- Revenue is projected to decrease by 13.07% this year but increase again by 6.69% next year.
- Earnings are estimated to decrease by 64.60% this year and increase by 103.81% next year.
Analyst and Investor Sentiment on Babcock & Wilcox
- The analysts tracked by Barchart gave Babcock 3 “Strong Buy” and 2 “Hold” ratings with price targets between $6 and $10.
- Value Line rates the stock “Above Average.”
- CFRA’s Market Scope rates the stock a “Hold.”
- Morningstar strongly disagrees and thinks the stock is 79% overvalued and comments: “With its quantitative economic moat rating of none, we do not expect this company to materially out earn its cost of capital in the long run. Additionally, the company’s weak financial health rating could portend bankruptcy risk if economic conditions weaken.”
- 5,490 investors are following the stock on Seeking Alpha, which rates the stock a “Hold.”
- Short interest is high at 10.97% of the float.
The Bottom Line on Babcock & Wilcox
I don't have a good feeling when Wall Street analysts ignore signs given by Value investors like Morningstar and short sellers. This is not a stock for cautious investors.
Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.
