DA Davidson Cuts Price Target on Babcock & Wilcox (BWC), CFO Resigns with Market Activity Still Low

DA Davidson is maintaining its Neutral rating on shares of Babcock & Wilcox (NYSE: BWC), but is cutting its price target from $33 to $30 following the resignation of its CFO, Michael Taff.

Mr. Taff will resign from his CFO position effective July 30, but will continue to work for the company as a consultant and perform the CFO duties for up to 12 months during the search for a new CFO. Mr. Taff has indicated that he will be returning to Houston, Texas to be with family.

The firm believes that the prospects for B&W’s power plant component and support business will improve with increased spending by power plant owners, essentially for emissions controls on coal-fired plants. An analyst at DA Davidson comments, "However, the market improvement is being delayed by slow imposition of new environmental regulations, gas-fired generation as a low-cost alternative for new generation, as well as current excess generation capacity. Eventually we expect a cyclical recovery in power plant investment, despite a likely long-term loss of relative share of coal as a fuel source."

For more ratings news on Babcock & Wilcox click here and for the rating history of Babcock & Wilcox click here.

Shares of Babcock & Wilcox closed at $26.81 yesterday.

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