Analysts on Wall Street have kicked off coverage of X-Energy (XE), the small modular reactor (SMR) company backed by Amazon (AMZN), with largely bullish ratings. JPMorgan (JPM) believes that the company — which made its public market debut last month — has emerged as a “frontrunner” in the SMR race.
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High conviction AMZN bears now have this Tradr ETFAfter closing Monday’s trading 6.23% lower, X-Energy shares rose over 1% early Tuesday following the ratings. By contrast, shares of rivals Oklo (OKLO) and NuScale Power (SMR), which also fell by about the same measure the previous day, remained in the red zone.
X-Energy’s Fuel Business Is a ‘Key Differentiator’
JPMorgan analyst Jeremy Tonet commenced his coverage with an Overweight (Buy) rating and set a price target of $38, which implies about 48% upside from XE’s closing price of $25.60 on Tuesday. Tonet argued that X-Energy’s 11.5 gigawatt backlog through its nuclear energy deployment agreements with Amazon, specialty chemical producer Dow (DOW), and British energy services giant Centrica (CPYYY) established the company “as a frontrunner” in the SMR market.
The five-star analyst also noted that X-Energy’s control of the key stages of the value chain for its in-house nuclear fuel business, TRISO-X, makes for a “key differentiator.” He added that the business, including its licensing rights, gives X-Energy “a durable competitive moat” that has pushed it years ahead of competitors.
X-Energy Is a ‘Pure-Play Leader’ in SMR
Similarly, Guggenheim analyst Joseph Osha described X-Energy as a “pure-play leader” in next-generation nuclear technology with an “industry-leading” contracted backlog.
Osha also praised X-Energy’s licensing business model as “capital efficient,” with the company generating revenues without owning or operating the required facilities. The five-star analyst called XE a Buy and set a price target of $57, implying a 122% upside from yesterday’s closing price.
However, Jefferies’ Julien Dumoulin-Smith prefers to be cautious and slapped a Hold rating on XE stock. Dumoulin-Smith set a price target of $28, which suggests about 9% upside from current trading levels. The five-star analyst noted that XE jumped 10% following its initial public offering and believes that the stock’s risk and reward potential are now roughly even.
Which Nuclear Stock Is the Best Buy?
TipRanks’ Stock Comparison tool shows Oklo (OKLO) only slightly beats NuScale Power to offer the biggest upside of roughly 54%. This is based on an average price target of $90.
