June 2025 – CWEB Business News – In a move reflecting the financial sector’s growing interest in advanced nuclear energy, Citi Research has initiated equity coverage on NuScale Power Corporation (NYSE: SMR) with a Neutral rating and a $46 price target. While acknowledging NuScale’s first-mover advantage in the small modular reactor (SMR) space, Citi highlights concerns around valuation and execution risk, suggesting limited near-term upside for investors at current levels.

NuScale Positioned at the Forefront of Nuclear Innovation

NuScale Power is emerging as a leading force in the next-generation nuclear industry, particularly as global demand for carbon-free baseload energy surges. Key drivers include the explosive growth of AI and hyperscale data centers, which require consistent and scalable power solutions.

NuScale’s 77 MW small modular reactor design, which has received regulatory approval and a recent power uprating, offers a meaningful technological edge. Its long-standing partnership with Fluor Corporation (NYSE: FLR) and independence from high-assay low-enriched uranium (HALEU)—a limiting factor for many competitors—adds resilience to its operating model.

Valuation Reflects High Expectations Amid Industry Uncertainty

Despite NuScale’s strategic positioning, Citi’s research notes that the company’s current valuation implies aggressive growth assumptions, including an ambitious 50 gigawatts of installed capacity by 2040. This forecast leaves limited margin for error, especially in an industry known for regulatory complexities, long development timelines, and significant capital intensity.

CWEB Business analysts emphasize that while new customer wins could act as catalysts, attention will increasingly shift to project execution, cost control, and competitive pressures from other SMR developers such as Rolls-Royce and GE Hitachi, both of which are progressing through global regulatory pathways.

Analyst Outlook: Neutral Stance Justified for Now

CWEB analysts agree with Citi’s balanced outlook, noting that while NuScale holds a pioneering role in the SMR ecosystem, challenges remain. These include navigating nuclear financing, demonstrating scalability, and achieving critical deployment milestones. The broader transition toward carbon-neutral energy infrastructure, especially in AI and cloud-driven economies, is a strong tailwind—but investor caution is warranted until the company delivers commercial progress.

Conclusion: A Promising but High-Stakes Bet on Clean Energy

Citi’s Neutral rating reflects the tension between NuScale’s long-term potential and the near-term uncertainty tied to execution and valuation. While the company could play a pivotal role in decarbonizing global power grids, the premium share price suggests much of the future growth is already priced in. Investors may consider adopting a wait-and-see strategy, looking for either a valuation reset or material operational advancements.

Stay with CWEB Business News for continued coverage of NuScale Power, SMR market developments, and the future of advanced nuclear energy.

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