BTIG Names BWX Technologies and Kratos Defense as Top Industrial Picks

Investment firm BTIG has identified BWX Technologies and Kratos Defense & Security Solutions as its top industrial sector picks for the 12-month period beginning in the second half of 2026, according to a new analyst report. The firm highlights increased defense spending and the "nuclear renaissance" as primary catalysts driving its high-conviction ideas.

BWX Technologies Taps Nuclear Revival

BTIG maintained its Buy rating on BWX Technologies (BWXT) with a $235 price target. The firm noted that BWXT, as the sole-source manufacturer of naval nuclear reactors for the U.S. Navy, is uniquely positioned to benefit from long-term government demand.

According to the report, several near-term catalysts support the investment thesis:

• The U.S. Navy's 30-year shipbuilding plan provides significant revenue visibility.
• An $80 billion U.S. government and Westinghouse initiative aims to build ten AP1000 reactors by 2030.
• A recent $40 billion Japanese investment in the U.S. could generate an $800 million to $1 billion opportunity for BWXT across 8-10 projects.

BWXT also supplies components for small modular reactors (SMRs) and microreactors, including for manufacturers like GE-Hitachi and Terrapower. The stock has gained 7.0% year-to-date, compared to a 9.3% rise in the S&P 500, as of the report's pricing date of June 30, 2026.

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Kratos Seen as a Defense Growth Play

For Kratos Defense & Security Solutions (KTOS), BTIG assigned a Buy rating with a $100 price target. The firm acknowledged the stock's significant underperformance, with a 37.1% year-to-date decline, attributing it to multiple compression in the defense technology sector and delayed contract awards.

However, BTIG projects topline growth of approximately 30% in both 2026 and 2027, which is ahead of consensus estimates in the low-20% range. This growth is expected to be driven by investments in hypersonics, unmanned systems, and propulsion technologies.

The firm pointed to $156 billion in defense reconciliation funding authorized over five years as a major tailwind. The Department of War has indicated its intent to obligate the full amount in fiscal year 2026, which could accelerate key Kratos-relevant programs.