NuScale Power (NYSE:SMR) -12.8% in Tuesday’s trading as Citigroup downgraded shares to Sell/High Risk from Neutral/High Risk with a $37.50 price target, “as a binding customer contract remains elusive, competition from new entrants heats up, further sale of interest by Fluor (FLR) weighs on the stock, and the company trades at a stretched valuation.”
Citi analysts estimate NuScale (NYSE:SMR) shares are pricing in ~16 GW of reactors by 2040 vs. the bank’s forecast of ~56 GW of reactors to be installed in total in the U.S., believing such a “level of market share in a crowded market is too high, especially as the company does not yet have an identified customer.”
NuScale (SMR) has guided to one customer agreement to year-end 2025, with the current framework a non-binding deal with TVA and developer ENTRA1 for a potential PPA covering 6 GW; once signed, Citi said NuScale would still need to secure an OEM agreement to supply NPM units, leaving the timing of the PPA timing and contract signing uncertain.
If an agreement is reached for all 6 GW, NuScale (SMR) would potentially contribute ~$500 million via multiple tranches to ENTRA1, but the company had only $420 million in cash and cash equivalents as of Q2 2025, Citi noted.
“We believe the market is giving too much credit for this deal, as the timeline likely will be longer than expected, and the capital needs could weigh heavily, especially since the deal is not guaranteed, [and the company] does not have material near-term customers to fall back on, making it reliant on its active projects unless new entrants emerge, which we view as unlikely,” Citi wrote.