Wells Fargo lowers Nuscale Power stock rating due to financial and market worries – Investing.com

Wells Fargo lowers Nuscale Power stock rating due to financial and market worries – Investing.com

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On Tuesday, Wells Fargo downgraded Nuscale Power (NYSE: SMR) stock from Equal Weight to Underweight, setting a new price target of $4.50, a significant drop from the previous target of 7 $.50. This downgrade reflects concerns about the company’s financial situation and its competitiveness in the market.

The Wells Fargo analyst expressed skepticism about the recent rise in shares of Nuscale Power, which is up 207% year to date, compared to an 8% rise in . The stock’s positive momentum was attributed to progress in the nuclear sector, particularly benefiting nuclear owners CEG and TLNE. However, the analyst believes that investors’ enthusiasm for Nuscale Power is unwarranted.

The rationale for the downgrade and new price target includes several key concerns. First, Nuscale Power found no customers for its VOYGR product. In addition, the company’s financial situation is precarious, with available liquidity enabling it to operate for approximately one year. This financial situation could pose significant challenges in attracting new customers.

Additionally, the cost competitiveness of VOYGR technology is questioned compared to other sources of electricity generation. The company’s flagship project, the Carbon Free Power Project (CFPP), also ended after more than a decade of development, casting further doubt on the company’s future prospects.

The revised price target of $4.50 per share is based on the assumption that Nuscale will be able to increase its annual sales of nuclear power module units to approximately 30, or 2,300 MW, by the mid-2000s. 2030. This is despite the fact that the company has not made any unit sales to date.

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