According to Evercore ISI, Centrus Energy is a “essential” stock for investors looking to benefit from expanding US nuclear power generation to meet the electricity demand from US nuclear power centers. Evercore began compensation for Centrus, the equivalent of its purchase rating, on Tuesday, giving it a 12-month price target of $145, meaning an increase of over 50% from Tuesday’s closing price at $92.57 per share. Central holds a key niche in the nuclear supply chain, Evercore analyst Nicholas Amicic told clients in a memo. The US Entrichment Corp., a division of the energy sector that was privatised by an IPO in 1998, is Centrus, the only public company in the world working to enrich nuclear fuels. Centrus is also the only company approved in the US to produce highly enriched uranium, the fuel needed for small and micro-reactors, which is considered the industrial future. Leu 6m Mountain Centrus has been sharing its stock for the past six months. Central has a competitive advantage and the barriers to entry into the enrichment industry are so high that it only expands over time, analysts said. The current contract with the utility has been extended until 2040. “The race is trying to improve the world’s nuclear power capabilities through various facility types (such as SMRs, microreactors) with relative winners and losers,” the analyst said. “One thing is clear. All of these facilities require enriched uranium, which is where the center has a wide moat,” he said.
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