What Happened?
Shares of aerospace and defense company BWX (NYSE: BWXT) jumped 3.6% in the afternoon session after Wyoming's top energy agency recommended a $100 million grant to support the company's proposed TRISO nuclear fuel manufacturing plant.
The grant would support a $500 million facility that BWXT proposed to build in Gillette, with construction slated to start in about a year and an in-service target of 2030. This move signaled potential government backing for the company's expansion into advanced nuclear fuel. Adding to the positive sentiment, analysts at Baird raised their price target on the stock to $250 from $166, while Bank of America Securities also increased its price objective to $220, citing continued demand.
After the initial pop the shares cooled down to $197.20, up 3.8% from previous close.
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What Is The Market Telling Us
BWX’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 25 days ago when the stock gained 3.4% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
BWX is up 77% since the beginning of the year, and at $197.20 per share, has set a new 52-week high. Investors who bought $1,000 worth of BWX’s shares 5 years ago would now be looking at an investment worth $3,412.
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