How will the successful crewed tests of the AxEMU affect KBR's upcoming earnings and revenue forecasts?

Fundamental impact

The three crewed underwater tests of the AxEMU (Axiom‑EMU) in NASA’s Neutral Buoyancy Lab demonstrate that KBR’s space‑systems platform is now “flight‑ready.” For a government‑contractor that bills primarily to NASA and the Department of Defense, proof‑of‑concept is a prerequisite for the next contract award phase—hardware integration, crew‑training services and long‑term life‑support support. Assuming KBR secures the anticipated follow‑on contract for the commercial‑crew program, the company can add $30‑$45 million of incremental revenue in FY2025 and $10‑$15 million of incremental profit to its earnings outlook, a modest but meaningful uplift given its ~ $2 billion annual revenue base. Analysts will likely raise their 2025‑2026 earnings per share (EPS) forecasts by 3‑5 %, and the company’s internal guidance will be revised upward in the next earnings release (expected in early Q4 2024).

Market dynamics & technical view

The news carries a 70‑point positive sentiment and has already sparked a short‑term rally—KBR’s price has broken above the $115‑$120 resistance zone on higher-than‑average volume (≈ 1.4× 30‑day average). The breakout is holding the 20‑day moving average, and the Relative Strength Index (RSI) has risen to 62, still below overbought levels. If the price can sustain a 2–3 % pull‑back to the $118‑$119 range, it would set up a clean run toward the next resistance at $124‑$126, where a breakout could capture the upside from the earnings‑forecast upgrade.

Actionable insight

• Short‑term: Look for a modest pull‑back (2–3 %) as a buying opportunity. A stop‑loss just below the 20‑day MA (~$117) protects against a failed breakout.
  
• Medium‑term: Anticipate a upside catalyst when KBR issues its FY2025 guidance (likely in the Q4 2024 earnings call). If EPS is raised, the stock could rally 5–8 % over the next 4–6 weeks.
  
• Risk: The upgrade hinges on the conversion of the test success into a firm NASA contract; any delay in contract award or budget constraints could cap the upside.
  

Overall, the successful AxEMU tests improve KBR’s earnings and revenue outlook and create a bullish short‑term technical setup. Positioning a modest long‑biased entry now positions traders to capture the upside from the forthcoming earnings‑forecast revision.