Babcock (NYSE:BW) Shares Gap Up - Should You Buy?

Key Points

• Babcock shares opened sharply higher, rising from a previous close of $7.16 to $7.68 before settling near $7.43, with 846,562 shares traded.
• Analyst sentiment remains mixed: Needham initiated coverage with a Buy rating and a $20 target, while the broader consensus is Hold with a $15.40 price target.
• The company exceeded quarterly expectations, reporting $0.04 in EPS versus $0.02 expected and revenue of $319.69 million versus $196.95 million. However, Babcock posted negative net margins and return on equity, alongside a high debt-to-equity ratio of 4.21.

Babcock (NYSE:BW - Get Free Report)'s share price gapped up before the market opened on Monday . The stock had previously closed at $7.16, but opened at $7.68. Babcock shares last traded at $7.43, with a volume of 846,562 shares traded.

Analyst Upgrades and Downgrades

Several analysts recently commented on the company. Needham & Company LLC began coverage on Babcock in a research note on Monday. They issued a "buy" rating and a $20.00 price target on the stock. Northland Securities set a $23.00 price objective on Babcock in a research note on Tuesday, May 12th. Wall Street Zen cut Babcock from a "buy" rating to a "hold" rating in a report on Sunday, August 23rd. Finally, Weiss Ratings upgraded shares of Babcock from a "sell (d-)" rating to a "sell (d+)" rating in a research note on Tuesday, August 11th. Four analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the company has a consensus rating of "Hold" and a consensus price target of $15.40.

Babcock Stock Up 2.0%

The company has a debt-to-equity ratio of 4.21, a quick ratio of 1.33 and a current ratio of 1.45. The firm's 50-day simple moving average is $10.52 and its two-hundred day simple moving average is $13.53. The stock has a market cap of $1.09 billion, a price-to-earnings ratio of -40.44 and a beta of 1.22.

Babcock (NYSE:BW - Get Free Report) last posted its quarterly earnings data on Monday, August 10th. The technology company reported $0.04 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.02 by $0.02. Babcock had a negative return on equity of 4.51% and a negative net margin of 2.17%.The firm had revenue of $319.69 million for the quarter, compared to the consensus estimate of $196.95 million. On average, sell-side analysts expect that Babcock will post 0.27 EPS for the current fiscal year.

Insider Buying and Selling at Babcock

In related news, Director Philip D. Moeller acquired 5,000 shares of the firm's stock in a transaction that occurred on Thursday, August 13th. The stock was acquired at an average cost of $9.50 per share, with a total value of $47,500.00. Following the completion of the purchase, the director directly owned 240,809 shares in the company, valued at approximately $2,287,685.50. This trade represents a 2.12% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. 2.80% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Royal Bank of Canada boosted its holdings in shares of Babcock by 57.3% in the first quarter. Royal Bank of Canada now owns 1,785 shares of the technology company's stock valued at $26,000 after buying an additional 650 shares during the period. Bank of New York Mellon Corp grew its holdings in shares of Babcock by 3.0% in the 1st quarter. Bank of New York Mellon Corp now owns 55,733 shares of the technology company's stock valued at $819,000 after acquiring an additional 1,604 shares in the last quarter. Mariner LLC increased its position in shares of Babcock by 10.8% during the 4th quarter. Mariner LLC now owns 16,608 shares of the technology company's stock worth $105,000 after purchasing an additional 1,620 shares during the last quarter. Chicago Partners Investment Group LLC raised its stake in shares of Babcock by 30.6% during the 1st quarter. Chicago Partners Investment Group LLC now owns 13,057 shares of the technology company's stock worth $208,000 after purchasing an additional 3,057 shares in the last quarter. Finally, Rockefeller Capital Management L.P. bought a new stake in shares of Babcock during the 4th quarter worth approximately $25,000. 83.17% of the stock is owned by institutional investors and hedge funds.

Babcock Company Profile

Babcock & Wilcox Enterprises, Inc NYSE: BW is a specialized provider of energy and environmental technologies and services serving power generation and heavy industrial markets. The company designs, manufactures and maintains critical components and systems that support the safe and efficient operation of both fossil-fuel and renewable power facilities. Its core offerings include industrial and utility boilers, environmental control systems for emissions reduction, and aftermarket support services ranging from inspection and maintenance to spare parts management.

In addition to its boiler and emissions control portfolio, Babcock & Wilcox Enterprises delivers lifecycle solutions aimed at enhancing plant performance and compliance.

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