3 Reasons Wall Street Analysts Remain Bullish on NuScale Power Stock

NuScale Power shares are down over 30% year-to-date and more than 70% over the past 12 months, despite analysts keeping buy ratings. B. Riley cut its price target from $19 to $15 while betting on a potential TVA power purchase agreement that could commit TVA to buying SMR power at a predetermined rate, reducing cancellation risk and enabling construction; a PPA is suggested to be possible by end-2026. The company also has a long-dated Romania RoPower SMR project moving through government review, while the balance sheet risk remains as cash of $1.9B is partially offset by ~$60M operating losses and likely dilution.

Analysis

SMR is still trading like a binary commercialization option, not like a de-risked infrastructure asset. The market will only assign a higher multiple when a binding offtake agreement converts future demand into financeable cash flows; until then, every delay leaves the equity exposed to dilution and a lower implied probability of project completion.

The clearest second-order winner is the broader nuclear supply chain, especially names that can monetize a buildout regardless of which reactor vendor wins: uranium/fuel-cycle exposure, component suppliers, and engineering contractors. By contrast, SMR’s peers face a mixed setup: any progress validates the category, but successful financing for one project could also widen the valuation gap versus pre-revenue competitors that still lack a contracted customer.

The risk/reward is asymmetric only if the next catalyst is truly contractual, not rhetorical. If a TVA PPA slips into 2026 or financing details for Romania remain opaque, the stock can keep drifting as investors re-price the probability of repeated equity issuance. The contrarian mistake is assuming regulatory approval equals commercial viability; the real test is whether a utility will accept long-dated, fixed-price nuclear power at a rate that beats gas-plus-storage alternatives.

What would falsify the bearish view is a signed TVA PPA with credible project-finance terms and disclosed third-party capital for RoPower within the next 1-2 quarters. Absent that, the right framing is watchlist, not chase: the company has runway, but not yet evidence that cash burn will convert into contracted backlog.

Key Decisions for Investors

• Stay neutral/underweight SMR into any analyst-driven pop; treat rallies as opportunities to fade until a binding TVA PPA is announced. Risk: a signed contract could trigger a sharp short squeeze, so keep any short exposure small and event-aware.
• If seeking secular nuclear exposure, prefer a basket trade long URA or CCJ versus short SMR over the next 1-3 months. This captures the AI-power theme while reducing single-name execution and dilution risk.
• Only consider a bullish SMR call spread after a definitive TVA PPA or financed RoPower update; otherwise do not pay for optionality. Use 6-12 month tenor because the catalyst path is measured in quarters, not days.
• Set a hard watch item: if no binding TVA contract or financing disclosure lands by year-end, expect further multiple compression and reassess downside toward prior equity-raise levels.