TLDR
- BofA Securities upgraded NuScale Power (NYSE:SMR) from Underperform to Neutral, lowering price target to $28 from $34
- Stock dropped 60% from TVA announcement peak and 44.5% over six months but gained 20.6% in past week
- BofA cited funding mismatches, higher cash requirements, and dilution concerns for near-term outlook
- NRC approved NuScale’s uprated 77 MWe reactor design in May 2025
- TVA deal with ENTRA1 Energy in September 2025 covers up to 6 GW deployment using NuScale technology
NuScale Power shares surged over 12% in Friday’s premarket session after BofA Securities upgraded the stock. The rating change came following a 9% decline over the previous month.
NuScale Power Corporation, SMR
BofA moved NuScale Power from Underperform to Neutral. The firm cut its price target to $28 from $34. The new target implies 42% upside from Thursday’s close of $19.67.
The upgrade reflects the stock’s steep fall from its post-TVA announcement peak. Analyst Dimple Gosai stated the 60% correction brought valuation to a level matching current challenges.
The stock has declined 44.5% over six months. Recent trading showed strength with a 20.6% gain in the past week.
BofA identified several concerns in its assessment. The firm noted a funding and timing mismatch in the ENTRA1 Partnership Milestones Agreement. Higher near-term cash needs also present challenges. Dilution is accelerating before original equipment manufacturer revenue begins.
NuScale maintains a solid financial position. The company holds more cash than debt. Its current ratio of 1.62 shows liquid assets exceed short-term obligations.
NRC Approval and TVA Partnership
The Nuclear Regulatory Commission approved NuScale’s uprated reactor design in May 2025. The company increased its power module capacity to 77 megawatt-electric from 50 MWe.
NuScale’s uprated power module became the second small modular reactor design receiving NRC approval.
Tennessee Valley Authority signed an agreement with ENTRA1 Energy in September 2025. The deal involves deploying up to six gigawatts using NuScale’s SMR technology.
BofA stated the derisked Light-Water Reactor design and TVA licensing agreement strengthen credibility. The firm views NuScale’s deployments closer to its base case.
Analyst Outlook
BofA maintained its long-term view of 18 GW cumulative deployment through 2040 for small modular reactors. The analyst noted the upgrade doesn’t change their long-term SMR outlook.
The firm acknowledged near-term cash flow and equity overhang keep risk/reward balanced. Limited contract visibility caps near-term upside for the stock.
NuScale initiated a $750 million at-the-market equity offering program. Sales agents include UBS Securities LLC and TD Securities (USA) LLC.
