BofA reinstated coverage of NuScale Power Corporation (NYSE: SMR) on May 22 with a “Neutral” rating and assigned the stock a price target of $12.
The analyst firm highlighted NuScale’s status as the only company with a U.S. Nuclear Regulatory Commission Standard Design Approval, granting it a significant first-mover regulatory advantage.
BofA also noted that NuScale’s use of conventional low-enriched uranium fuel provides “a clear credibility lead versus peers,” further distinguishing it from competitors in the small modular reactor space.
NuScale provides small modular reactor technology solutions, with its NuScale Power Module designed as a 12-module plant capable of producing up to 924 MWe of carbon-free energy.
Despite its regulatory edge, BofA flagged that NuScale’s revenues remain tied to services, with its first reactor not expected to generate power until the early 2030s.
The analyst firm also noted that the company’s progress in converting agreements into binding contracts has been slower than initially expected, raising questions about near-term commercial momentum.
SMR deployment requires significant upfront capital and a robust balance sheet, adding further pressure on the company’s financial position in the years ahead.
While NuScale’s peers have been increasingly successful in securing hyperscaler-supported agreements, the company remains underexposed and vulnerable to near-term funding risk, according to BofA.
The combination of delayed revenue generation, slower contract conversion, and capital intensity appears to be the primary factors behind BofA’s decision to reinstate coverage at a neutral rather than bullish stance.
NuScale’s first-mover regulatory advantage remains a meaningful differentiator, but analysts suggest it may not be sufficient on its own to offset the financial and operational challenges the company faces in the near term.
The reinstatement comes as broader investor interest in nuclear energy continues to grow, with small modular reactor technology increasingly viewed as a long-term solution to rising global energy demand and decarbonization goals.
