BofA Securities initiates Centrus Energy stock with buy rating

Published 04/06/2025, 12:28
BofA Securities initiates Centrus Energy stock with buy rating

On Wednesday, BofA Securities analysts initiated coverage on Centrus Energy Corp. (NYSE: NYSE:LEU) with a Buy rating and set a price target of $160. This new rating reflects an anticipated upside of approximately 22% for the company. The stock has shown remarkable momentum, delivering a 191% return over the past year and currently trading near its 52-week high of $139.According to InvestingPro data, Centrus maintains strong financial health with a "GREAT" overall score, suggesting solid fundamentals supporting the analyst’s bullish stance.

Centrus Energy is noted as the only publicly-traded company specializing in enriched nuclear fuel, a sector that is currently on a growth trajectory. The company is a leading distributor of low-enriched uranium (LEU) nuclear fuel in the United States, which holds the position as the largest nuclear power market globally. With a market capitalization of $2.24 billion and impressive revenue growth of 59% in the last twelve months, Centrus demonstrates strong market presence and expansion.

The analysts highlighted Centrus Energy’s technical solutions segment, which includes a high-assay low-enriched uranium (HALEU) fuel business. This segment is considered crucial for next-generation reactors and has potential for future expansion.

Looking ahead, Centrus Energy plans to build its own LEU production capacity, with operations expected to begin in 2029. This development is projected to be part of a decade-long expansion strategy.

The price target of $160 is based on a valuation of 1.5 times the estimated net asset value, which is higher than its nuclear fuel peers. This premium accounts for possible unmodeled upside in both LEU and HALEU sectors.

In other recent news, Centrus Energy reported impressive financial results for the first quarter of 2025, significantly surpassing earnings expectations. The company achieved an earnings per share (EPS) of $1.60, far exceeding the forecasted -$0.02, and revenue reached $73.1 million, beating projections of $70.65 million. Additionally, Centrus Energy has doubled its "at the market" (ATM) offering program to $200 million, allowing for increased flexibility in raising capital as market conditions permit. Analyst firms William Blair and Evercore ISI have both initiated coverage on Centrus Energy with an Outperform rating, highlighting the company’s unique position as the only U.S.-owned uranium enricher. Evercore ISI set a price target of $145, citing Centrus Energy’s critical role in the domestic production of High Assay Low-Enriched Uranium (HALEU). The expansion of Centrus Energy’s ATM program and the positive analyst ratings reflect growing confidence in the company’s strategic direction and market potential. These developments underscore Centrus Energy’s strategic importance within the nuclear fuel industry, particularly in light of increasing global demand for enriched uranium.

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