UBS analyst Jon Windham initiates coverage on X-Energy Inc (NASDAQ: XE) with a Buy rating and a price target of $40.00.

The analyst comments: “XE is highly differentiated compared to other publicly listed SMR peers driven by its integrated reactor, fuel and services business model; award under the U.S. DOE Advanced Reactor Demonstration Program; and lead in speed-to-market and strongest customer commitments, in our view. We model for XE to grow total services revenues at 37% p.a. 2026-40E.

We anticipate that potential nuclear capacity additions could be 100-400GW by 2050, in the U.S. alone. We anticipate that only 2-4 4G nuclear technologies will scale for utility-scale electricity and heat in the U.S. Our 2041 estimate of total XE capacity deployed represents less than 2% of total U.S. generation capacity in 2041E. If successful, XE’s U.S. TAM is substantially larger than the UBSe cumulative installations through 2041 of 25GW with further upside from international expansion. Based on a total revenue opportunity of ~$4.3bn per Xe-100 plant, we estimate XE's TAM at ~$1.3tn for every 100GW of nuclear deployments.”

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Shares of X-Energy Inc closed at $25.60 yesterday.