Citi starts NuScale at neutral/high risk, $46 PT

Brokerage Citi Research starts coverage on utility firm NuScale SMR.N with neutral/high risk rating and $46 PT

PT implies a 26% upside to the stock's last close

Brokerage highlights NuScale's role in capitalizing on rising data center demand and having first-mover advantage, but also flags significant execution risks

NuScale has the only approved small modular reactor (SMR) design in the US, modular technology not dependent on HALEU fuel, and strong supply chain and partner relationships (notably with South Korea's Doosan and Fluor Corp FLR.N) - brokerage says

Key risks include execution challenges, FLR ownership overhang, uncertain revenue models, possible cost overruns, intensifying competition, and expected negative free cash flow in the near term - Citi

Rising power demand, especially from datacenters and AI could boost nuclear's role in the energy mix, and NuScale is in talks with several datacenter customers, expecting a first plant by 2030, according to Citi

Including session's move, SMR stock up 103.6% YTD