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Aerospace & Defense

Everything our editor has picked under this sector, best first.

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@StableBread

Fajasy on X

The Navy plans to buy more ships, and BWX Technologies $BWXT doesn’t charge a set price per reactor. $BWXT makes the fuel, reactor cores, steam generators, and other reactor components for the Navy’s Virginia- and Columbia-class submarines and Ford-class carriers. $BWXT now produces two to three of these reactors/year, Joe Miller, president of Government Operations, said at its Investor Day on September 29, 2026. The Navy buys under multi-year pricing agreements, so orders arrive in large blocks: → February 2025: $2.1B of naval reactor component contracts. → July 2025: $2.6B, including options. → May 2026: $1.45B, mostly long-lead material (parts ordered years before a ship is built) under the first of five annual task orders through 2030. → October 2026: $189M of naval fuel, to be completed by August 2027. $BWXT’s plants carry large fixed costs, so final pricing depends on how many ship sets (all the reactor components for one ship) the Navy orders, CFO Mike Fitzgerald said at Investor Day. The Navy’s 30-year shipbuilding plan, released in May, calls for (1) “buying two attack boats per year for the next 30 years,” meaning Virginia-class submarines, (2) a new carrier every four years instead of every five, and (3) 15 nuclear-powered Trump-class battleships, per USNI News, the U.S. Naval Institute’s news service. $BWXT’s own read of the plan is naval growth of 4-6%/year from the existing ship classes. Each Ford-class ship set takes ~8 years to deliver, so ordering a carrier every five years left gap years with one ship set in $BWXT’s plants instead of two. CEO Rex Geveden said on the Q2 call that the four-year cadence takes out “that revenue bathtub that we’ve been going through” and has “a bigger volume impact than even adding a battleship.” The next carrier’s long-lead orders come in 2028, but Fitzgerald said at Investor Day the faster cadence won’t really show up in $BWXT’s numbers until around 2030. A Trump-class battleship would use one Ford-class reactor (a carrier uses two), so $BWXT could build the reactor on its existing lines, but Congress still has to fund the program. Fitzgerald said $BWXT’s 2030 targets exclude the battleship program, so congressional funding would be extra growth.
@StableBread 2 clicks

Fajasy on X

“Tens of billions of new opportunity” is how BWX Technologies $BWXT CEO Rex Geveden describes uranium enrichment, the middle of the nuclear fuel chain. After naval reactors, $BWXT’s other big government business is uranium, which it calls special materials. It covers processing, downblending (diluting Cold War-era high-enriched uranium into lower-enriched fuel), and now enrichment for defense use. $BWXT says revenue grew from ~$285M in 2023 to ~$550M in 2026 guidance, 24%/year, and expects high-single to low-double-digit growth from there to 2030. Geveden named its two largest growth programs on the August 3 call, high-purity depleted uranium (HPDU) and defense fuels enrichment. $BWXT’s release on its purchase of Aerojet Ordnance Tennessee (A.O.T.) from L3Harris $LHX calls the unit the “sole provider of depleted uranium to the U.S. government.” Nine months after the purchase closed, $BWXT won a $1.6B, 10-year contract to produce up to 300 metric tons/year of HPDU at A.O.T.’s Jonesborough, Tennessee site. HPDU is depleted uranium metal refined to the purity the National Nuclear Security Administration (NNSA), the Department of Energy (DOE) agency running the nuclear weapons complex, needs at its Y-12 plant to maintain the deterrent. Construction starts in late 2026, per $BWXT’s Investor Day on September 29, 2026. For defense fuels, the military needs unobligated uranium, meaning uranium free of the peaceful-use pledges attached to foreign-supplied material. An August 2026 report from the Government Accountability Office (GAO), Congress’s audit arm, says the last U.S. plant able to enrich unobligated material, the Paducah plant in Kentucky, stopped in 2013. In September 2025, NNSA awarded $BWXT a sole-source contract valued at $1.5B to license, build, and run a pilot enrichment plant at Erwin, Tennessee, per the same report. $BWXT built a centrifuge manufacturing facility in Oak Ridge in seven months, plans to test its first prototype centrifuge by the end of 2026, and expects to file the Erwin license application in Q1 2027, with the plant running ~2035. Enrichment sits in the middle of the fuel chain, between uranium producers like Energy Fuels $UUUU and fuel plants like Erwin. The Investor Day deck says what’s “required to meet defense fuel needs through 2052” is $36.8B or more, citing the GAO and $BWXT’s own estimates. NNSA projects enough high-enriched uranium for naval propulsion “until the 2050s,” and enough unobligated low-enriched uranium for tritium (a hydrogen isotope used in nuclear warheads) through the early 2040s, per the same GAO report. Still, $BWXT earns revenue while it develops, licenses, and builds the plant, which is why the enrichment program drove most of the government segment’s Q2 2026 revenue growth.
@StableBread

Fajasy on X

How did a boiler maker founded in 1867 become the Navy’s reactor supplier? BWX Technologies’ $BWXT history runs through two spin-offs and a decade of acquisitions: → 1867: George Babcock and Stephen Wilcox found Babcock & Wilcox (B&W) to make steam boilers. → 1953-1955: B&W builds components for the USS Nautilus, the first nuclear-powered submarine. → 1978: J. Ray McDermott, an offshore engineering firm, buys B&W. → 2008: B&W buys Nuclear Fuel Services, the Erwin, Tennessee plant behind the Navy’s fuel. → 2010: B&W spins off from McDermott as a standalone public company. → 2015: B&W spins off its boiler business as Babcock & Wilcox Enterprises $BW and renames itself BWX Technologies, keeping the naval and other nuclear businesses. → 2016-2020: Buys GE Hitachi Nuclear Energy Canada (fuel for CANDU, Canada’s heavy-water reactor design, 2016), Nordion’s medical isotope business (2018), and nuclear parts maker Laker Energy (2020), building out the Canadian commercial business. → 2022: Wins Project Pele, the Pentagon’s prototype transportable microreactor. → 2025: Buys the Aerojet Ordnance Tennessee (A.O.T.) unit of L3Harris $LHX for ~$100M in January and closes the Kinectrics deal (a Toronto-based nuclear engineering and testing firm, ~US$525M including assumed liabilities) in May. → 2026: Closes its purchase of Precision Components Group (PCG), a U.S. maker of heat exchangers and other heavy components, for ~$200M on July 1. Most recently, on August 3, Nordic Capital, a private equity firm, agreed to buy just over 80% of $BWXT’s medical isotope business for $750M plus up to $50M more. $BWXT wasn’t looking to sell until Nordic reached out, CEO Rex Geveden said on the Q2 call the same day. CFO Mike Fitzgerald said on the same call that the medical business should bring in $130M of 2026 revenue, at a margin “modestly accretive” to the 13% $BWXT expects from its commercial segment. Nordic’s $750M for just over 80% implies ~$0.9B for 100%, or ~7x revenue. At a ~14% margin, that’s ~50x EBITDA, more than double the 22.5x EBITDA $BWXT trades at. So $BWXT is selling a small side business at a premium to focus on what it calls its core businesses, nuclear national security and nuclear power.
@StableBread

Fajasy on X

Nuclear should bring in $3.7B of the $3.8B of revenue BWX Technologies $BWXT expects in 2026. $BWXT builds nuclear reactors and their heavy components, manufactures nuclear fuel, then services reactors once they’re running. It reports two segments: → Government Operations (73% of 2025 segment revenue, $2,350.1M): Reactors and fuel for the Navy’s submarines and aircraft carriers, uranium processing for the government, microreactor programs, and stakes in the joint ventures running government nuclear sites (booked as equity income, not revenue). → Commercial Operations (27%, $853.1M): Steam generators (heat exchangers turning reactor heat into steam), reactor pressure vessels, fuel, and field services for power utilities, mostly in Ontario. Also Kinectrics (a Toronto-based nuclear engineering and testing firm acquired in 2025) and a medical isotope unit $BWXT is selling. Naval propulsion is the core, at “a little bit less than 1/2” of revenue, CEO Rex Geveden said at $BWXT’s Investor Day on September 29, 2026. Special materials (the government uranium business) makes up 15-20%, and commercial power ~30%. The U.S. government accounted for 68% of 2025 revenue, directly or through prime contractors, down from 76% in 2024 as the commercial side grew. Four large utilities accounted for another 17%, per the FY2025 10-K. What keeps the Navy from switching suppliers is licensing. Only two plants in the U.S. hold Nuclear Regulatory Commission (NRC) licenses to produce fuel from high-enriched uranium (HEU, enriched to 20% or more, which is what naval reactors run on). Both belong to $BWXT (Nuclear Fuel Services in Erwin, Tennessee, and its Lynchburg plant), and the 10-K calls Nuclear Fuel Services “the sole provider of nuclear fuel for the U.S. Navy.”
@StableBread

Fajasy on X

The Pentagon wants every major U.S. military installation to generate its own power. In August 2026, the Army chose five companies for Janus, a program expected to put more than 20 commercial microreactors on military bases. One of the five already builds the reactors for the Navy’s submarines and aircraft carriers, and its stock is down almost 40%. That company is BWX Technologies $BWXT, and even after a 7.6% jump on October 6, the stock is down 38.9% from its $238.42/share peak on April 15. $BWXT didn’t fall alone: → The VanEck Uranium and Nuclear ETF $NLR is down 33.4% from its January high, even after rising 5.5% on October 6. → Curtiss-Wright $CW, which supplies pumps and valves for the same submarines and carriers, is down 30.2% from its July high. So $BWXT got caught in a broader nuclear and defense selloff, but it fell further than both $NLR and $CW after guiding to slower growth in 2027. Meanwhile, $BWXT’s business got stronger: → Guidance up twice: 2026 adjusted EBITDA guidance rose from $645-660M in February to $662-672M in August. → An $8.4B backlog, more than double the $4.0B $BWXT had at the end of 2023. → CEO Rex Geveden calls $BWXT “the sole provider for naval reactors.” The Navy’s 30-year shipbuilding plan, released in May, calls for a new carrier every four years instead of every five. → The Army chose $BWXT’s 20-megawatt reactor for Janus at Fort Campbell, Kentucky, on August 26. On October 5, Prodigy Clean Energy, a Montreal-based developer of factory-built nuclear plants, chose the same reactor for a transportable power plant in New Brunswick. → 2030 targets: $BWXT targeted $5.5-6.0B of revenue and $1.1-1.2B of adjusted EBITDA in 2030. It’s on track to meet or beat all three targets it set in February 2024. Still, here’s what could hold the stock back: → $BWXT expects growth to slow in 2027. Its preliminary framework calls for high-single-digit growth in both revenue and adjusted EBITDA. → Even after the 38.9% drop, $BWXT isn’t cheap in absolute terms. It trades at 20.9x NTM EV/EBITDA and 29.3x earnings. → By CFO Mike Fitzgerald’s count, only a little over half of the revenue growth to 2030 comes from what $BWXT calls its “predictable core,” the programs backed by backlog and long-term contracts. The rest depends on new orders and acquisitions. → $BWXT’s Janus release discloses no dollar figure. Owning reactors is a new business model for $BWXT, with capital commitments it hasn’t disclosed. → No $BWXT insider has bought stock in the open market since at least January 2025, including during the drop from $238 to $135. → The government is running on a continuing resolution through December 11. At $145.70/share, BWXT has a market cap of $13.35B and an EV of $15.0B ($13.35B + $2.05B of debt - $0.40B of cash). It trades at 22.5x 2026 adjusted EBITDA guidance and 30.7x non-GAAP EPS guidance. In return, you get an $8.4B backlog, more than double the $4.0B BWXT had at the end of 2023. And on NTM estimates, its EV/EBITDA has dropped to 20.9x from ~35x in March, back to its 2024 levels. So is the Navy’s reactor supplier on sale, or does the market see a slowdown the numbers don’t show yet? That's what I answer in my new ~6,800 word deep dive on $BWXT! Credit to @GrumpierBTDay for the idea.
@pennycheck 1 click

⚽️📡 on X

I really think this can be a meaningful catalyst for Blacksky Aside from it opening a new vertical and revenue stream, as well as a entirely new TAM. The social arbitrage when every retail investor realizes how cool this tech is and the company behind the imagery and the AI read through on what the images says can be extreme. It is rolling out at first 4 observation sets related to 24 companies but obviously that is only the beginning. I believe this can be the start of a broader inflection of blackskys role in the mega theme i've been discussing the past few months of the value of proprietary data to increase exponentially over the coming months and years as advanced AI capabilities make the value and ease of monetization of proprietary data extremely valueable which also leads into how $BKSY edge in gen-3 having 35cm over the 50cm of competitors planet and satellogic become all the more valuable as AI tools. Many of these data 'moat' stocks have begun to re-rate in the past few months and I think this release on robinhood could be the start of that inflection in the sat names with blacksky leading the way to the social arb aspect of being integrated into hood as mentioned earier. $BKSY is also starting to become a massive beneficiary of the sovereign space infra spend which i've discussed and highlighted before with a now robust pipeline on sovereign deals through 27' as they discussed on the call. They also have moonshot upside working with the Air Force on orbital data centers. Shorts have begun to cover but still have a looooong way to go 20% is still short and as you probably know I am not a big TA guy but even i can spot a triple bottom I think it's a decent risk/reward assuming mkt can hold up a bit here
@StableBread

Fajasy on X

Elmet $ELMT won a ~$36M U.S. defense stockpile contract for metal its plants already make, while deliveries under its $2B stockpile contract wait on new supply. On September 30, Elmet announced the award from the Defense Logistics Agency (DLA), which manages the U.S. National Defense Stockpile. It covers TZM (titanium-zirconium-molybdenum alloy) billets, bar stock, and ingots, plus molybdenum and tungsten wire, materials used to make jet engine components. Elmet's $2B stockpile contract, announced September 14, is separate and covers tungsten concentrate, the upgraded ore a mine ships. The $36M is 27.4% of Elmet's $131.5M total backlog at July 3 ($36M / $131.5M), and the release doesn't say when deliveries start or how long the contract runs. On the slide for the $2B contract, Elmet's October 1 deck says Elmet "does not intend to begin delivering material into the National Defense Stockpile until sufficient incremental new supply is available." Elmet's supply agreement with Tungsten West (AIM: TUN) puts concentrate from Hemerdon, its tungsten mine in Devon, England, first in line for Elmet's DLA deliveries until Elmet's Nevada refinery is commissioned (targeted for 1H 2029). Elmet expects >1,000 tonnes a year of Hemerdon concentrate, and the mine targets full production by the end of Q1 2027. In September I treated $1.85B of the $2B ceiling as an upper bound, not orders Elmet has in hand, and the $36M sits outside the $2B entirely. So the stockpile's newest award goes to metal from Elmet's existing U.S. plants, while the $2B contract still waits on a mine in England that isn't at full production yet.
@Mike10947310 1 click

Mike on X

No one is really talking about it but defense names, and in particular larger names, have sold off quite violently. $ITA is down 20% since mid August and is now red on the year. For names which aren't highly subject to programs which might get cut during CR debates post-midterms, there are really attractive valuations as many have just been caught up in the capital rotation. For these names, there might still be some delays w/ funding, but ultimately, it will flow, and quite a few delays have been priced in at this point.

FTAI Aviation Deep Dive

FTAI Aviation is converting retired CFM56 jet engines into 25-megawatt data-center generators, supported by a $1.465 billion order likely…

FTAI $17B
CV's Substack 1 click