Wednesday, Canaccord Genuity maintained a positive stance on NuScale Power (NYSE:SMR), reiterating a Buy rating and a $26.00 price target.
The firm's analyst highlighted NuScale's position in the nuclear sector, particularly noting the company's Nuclear Regulatory Commission (NRC)-approved, Low-Enriched Uranium (LEU)-based reactor technology.
NuScale is recognized for its potential to capitalize on the growing interest in nuclear energy solutions. The analyst expressed anticipation for NuScale to announce a significant partnership, akin to deals made by private reactor companies such as Kairos and X-Energy.
The lack of a deal announcement so far is not seen as a lack of interest, but rather as a reflection of the extensive groundwork required for a near-term deployable solution like NuScale's.
The valuation of NuScale's stock is grounded in a Discounted Cash Flow (DCF) analysis, factoring in an approximately 12% Weighted Average Cost of Capital (WACC) and a 6% terminal growth rate.
The analysis anticipates that NuScale will need approximately $300 million in additional capital before it can generate positive free cash flow in the full-year 2028. The capital is expected to be raised at $17.50 per share, which is projected to result in less dilution than previously estimated by Canaccord Genuity.
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