vchal/iStock via Getty Images
NuScale Power (NYSE:SMR) -10.1% in Wednesday’s trading as BTIG downgraded the small modular reactor company to Neutral from Buy, noting the stock has more than doubled since Q1 earnings in mid-May when management guided to the company booking its first U.S. order by the end of this year.
“While we believe NuScale is well positioned for the eventual build out of SMR deployments in the U.S. as well as internationally (think Europe, Korea), we downgrade the stock… as we wait for the backlog to materialize and to get more clarity around project economics,” BTIG’s Gregory Lewis wrote.
Lewis said some catalysts boosting NuScale (NYSE:SMR) have played out, including the Nuclear Regulatory Commission’s award of Standard Design Approval; the U.S. Congress looks poised to continue support for domestic nuclear power development tied to the Inflation Reduction Act, unlike wind, solar, and electric vehicles; positive election results in Romania; and company management has remained positive on incremental order flow.
Unlike other SMRs looking to commercialize their design, NuScale’s (SMR) reactor operates on conventional nuclear fuel, which Lewis said is a driver of his longer-term bullish outlook for the company; with the U.S. government throwing its weight behind developing a domestic HALEU
supply chain, NuScale probably has a few-year head start which should help drive near-term orders.