Craig-Hallum more bullish on Babcock & Wilcox, upgrades to Buy

As previously reported, Craig-Hallum analyst Aaron Spychalla upgraded Babcock & Wilcox (BW) to Buy from Hold with a $7 price target, up from $1.50. The firm notes Babcock & Wilcox reported mixed Q3 results on continued growth in the high-margin Parts & Services business from baseload power generation demand, with largely in line 2026 EBITDA guidance calling for about 80% growth as work ramps on the $246M coal-togas conversion project in Indiana. More noteworthy was the signing of a limited notice to proceed on a $1.5B-plus contract with Applied Digital (APLD) for 1 gigawatt of natural gas power utilizing BW’s boilers and associated steam turbines for an Applied Digital AI Factory. Though still subject to a final notice to proceed, this is obviously a substantial development for a $600M business, and Craig-Hallum thinks shows the potential for BW to help bring baseload power generation online quicker, alleviating a key bottleneck in the market currently,