NuScale positioned for nuclear demand but faces long timelines

Investing.com -- RBC Capital Markets initiated coverage of NuScale Power with a Sector Perform rating and $35 price target, saying the company is well positioned in small modular reactors but faces long timelines and execution risks.

RBC said nuclear energy demand is “in the early stages of a resurgence” as customers and governments seek reliable, carbon-free power. It noted more than 50 gigawatts of demand commitments already tracked, with the U.S. aiming to triple nuclear capacity over the next 25 years.

NuScale, which holds the first NRC-approved design for small modular reactors, has a first-mover advantage.

Thogh brokerage warned that competitors are emerging, some of which may bring projects online sooner, while many others remain years away.

The firm pointed to delays in NuScale’s initial projects with partners RoPower and ENTRA1/TVA. It said securing a firm order by the end of 2025 looks unlikely, pushing back the company’s target of delivering its first reactor by 2030.

“Investor patience will be tested in the near term without tangible progress,” RBC wrote.

While NuScale’s partnership model shifts much of the financial and development risk to ENTRA1, RBC said this only transfers uncertainty, as ENTRA1 still needs to line up funding and buyers.

RBC’s $35 price target is based on a discounted cash flow analysis. The brokergae said it sees long-term upside if firm orders materialize, but for now remains cautious, looking for “additional proof points” before turning more positive.

You May Also Be Interested In

• Tesla Q2 deliveries crush forecasts at 480,126, erasing backlog concerns
• US legal sector adds 5,100 jobs in June, hits record high
• Tesla launches six-seat Model Y in US and Puerto Rico