Centrus Energy stock downgraded to Neutral by BofA despite price target hike

Published 07/08/2025, 12:16
Centrus Energy stock downgraded to Neutral by BofA despite price target hike

Investing.com - BofA Securities downgraded Centrus Energy Corp. (NYSE:LEU) from Buy to Neutral on Thursday, while simultaneously raising its price target to $285.00 from $210.00 following the company’s Q2 2025 earnings report. The stock has shown remarkable momentum, gaining nearly 250% year-to-date and maintaining strong momentum with an 8% rise in the past week.

The nuclear fuel supplier reported quarterly results that exceeded both BofA Securities’ and consensus expectations, with the outperformance primarily driven by stronger results in its low-enriched uranium segment due to favorable sales timing and contract mix. According to InvestingPro data, the company’s revenue grew 12.7% over the last twelve months, with a healthy gross profit margin of 36%.

During the second quarter, Centrus completed phase 2 of its high-assay low-enriched uranium (HALEU) contract with the U.S. Department of Energy and began portions of phase 3, while also strengthening its balance sheet through an at-the-market equity program. The company’s financial health remains robust, with a current ratio of 2.59 indicating strong liquidity.

BofA Securities raised its price objective based on strong quarterly results and an increase in its price-to-net asset value multiple to 2.5x from 2.0x, citing "increasing US government urgency to build-out domestic enrichment" capacity.

Despite the higher price target, the research firm downgraded the stock to Neutral, stating it views the shares as "now fairly valued" following recent appreciation, though it noted Centrus remains well-positioned to construct domestic productive LEU capacity with likely U.S. government funding support. InvestingPro analysis suggests the stock is currently overvalued, trading at elevated multiples with an EV/EBITDA of 35.8x and a price-to-book ratio of 11x. For deeper insights into Centrus Energy’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Centrus Energy Corp. reported robust financial results for the second quarter of 2025, significantly exceeding market expectations. The company announced an earnings per share (EPS) of $1.59, which was nearly double the anticipated $0.84, resulting in an EPS surprise of 89.29%. Revenue also surpassed forecasts, reaching $154.5 million compared to the expected $130.18 million, marking an 18.68% increase. These strong financial results reflect positively on Centrus Energy’s operational performance and have garnered investor confidence. Additionally, the company’s stock experienced a notable surge following the earnings announcement, indicating a positive market reaction. These developments highlight Centrus Energy’s strong position and potential for continued growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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