Shares in NuScale Power (SMR) tumbled by roughly 5% on Friday afternoon after B. Riley slashed its price target by 21%. The equity research firm cited a slower ramp-up in the American nuclear reactor developer’s project execution as investors await tangible progress in the deal with the Tennessee Valley Authority (TVA).
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Forget margin or options. Here's how the pros trade SMRIn September last year, NuScale Power signed a collaborative agreement with the U.S. public utility, with independent energy company ENTRA1 tasked with developing nuclear plants using NuScale Power’s small modular reactors. The goal is to develop a capacity of up to six gigawatts across the seven-state region of the public utility service.
Why B. Riley Cut Its SMR Price Target
However, B. Riley analyst Ryan Pfingst pointed out that investors are awaiting an update from the agreement. The analyst trimmed his SMR price target from $24 to $19, implying roughly 57% upside. However, he maintained his Buy rating on NuScale Power’s shares.
Pfingst is a top 3% researcher who ranks 307 out of the more than 12,000 analysts tracked on TipRanks. He boasts a 56% success rate and an average return of 81.50%.
HSBC Flags NuScale Power’s Business Model
The analyst’s comment comes in the same week HSBC’s Samantha Hoh slapped a Hold rating on NuScale Power, citing “significant execution and financial risk” due to NuScale Power’s first-of-a-kind technology.
However, Hoh’s research note also focused on how NuScale Power operates. She pointed out that the company’s business model of not spending heavily to build and own its plants but instead licensing its technology and offering pre- and post-construction services puts it “at the mercy of customers in terms of the pace of execution.”
Separately, the HSBC analyst flagged peer Oklo’s (OKLO) “owner-operator” business model.
Is NuScale Power a Good Stock to Buy?
Across Wall Street, NuScale Power’s shares remain a Moderate Buy based on analysts’ consensus rating. This breaks down into five Buys, seven Holds, and one Sell assigned over the past three months.
However, the average SMR price target of $16.91 points to more than 39% upside in the months ahead.
