New trends in nuclear energy: NuScale (SMR.US) modular technology is favored, market prospects and challenges under Citi's neutral rating

The Zhitong Finance App learned that the stock price of the US nuclear energy technology company NuScale Power (SMR.US) fell 1.8% on Monday. Citigroup (C.US) paid attention to the stock and gave it a “neutral” rating, setting a target price of 46 US dollars. The analysis points out that although the stock price of this small modular reactor technology developer has almost tripled from the April low, the risk of a pullback due to the accumulation of short-term increases is gradually showing.

Citi analyst Vikram Bagley emphasized in the research report that NuScale has a significant first-mover advantage driven by surging electricity demand in the data center and artificial intelligence industry. Its unrated but approved 77-MW modular reactor design, flexible modular technology, stable supply chain cooperation system, and deep partnership with engineering giant Fluor (FLR.US), combined with the supply chain advantage of not relying on high-purity low-enriched uranium HALEU, have placed the company in an advantageous position in the competition for new orders to be announced soon.

However, Bagley also warned that the current stock price in the market already implied optimistic expectations of achieving nearly 50 gigawatts of installed capacity by 2040, and there is still significant uncertainty at the actual implementation level. He analyzed that although the signing of new customer contracts may drive up stock prices in the short term, “after the order is executed, as industry competition intensifies and regulatory approval progresses, the market focus will completely shift to the company's project execution capabilities and fundamental performance.” This gap between expectations and reality may be an important cause of stock price fluctuations, and investors are advised to be cautious in their optimism.