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BWX is a screaming buy from here, page-22

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Tarvold

23,134 Posts.

1261

10/01/19

09:00

Post #: 37075979
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Originally posted by Icahn ↑

Originally posted by r0k1758
Do you really think the EBITDA target of 29.5M is realistic considering the 7M 1H19 projected results? You're implying a ~76% skew to 2H19 earnings which is very optimistic in our depressed economic cycle.

It seems that the stock is fairly cheap but maybe that's because of the massive amount of execution risk?
Currently, the market is pricing in $25m EBITDA for FY19e (-$2m below the lowest end of guidance) trading on a historically low 1-yr FWD EV/EBITDA multiple of 8x.

As a reasonable base case, if they hit $29.5m for the FY (mid-point of mgmt. guidance) re-rates to 11x EBITDA (still significantly lower than the 14-22x range it’s traded over the L2Y) it gets you 62% upside

Obviously the 76% skew for EBITDA to the 2H to hit the midpoint of FY19e guidance is worrying. But that’s why it’s cheap. If they can hit / beat the $7m for the 1H, it will go a long way in generating faith in management.

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They won't hit $20m let alone $25m or $29.5m.

BWX Price at posting: $1.46 Sentiment: None Disclosure: Not Held
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