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Investing.com - Evercore ISI initiated coverage on Fermi (NASDAQ:FRMI) with an Outperform rating and a price target of $37.00, highlighting the company’s position in the AI and datacenter power ecosystem. The stock currently trades at $25.15, with InvestingPro data showing significant room for upside from its 52-week range of $24.30 to $36.99.
The research firm views Fermi as a "key foundational holding for ANY investor seeking exposure to the secular AI/datacenter/power demand thematic," according to its analysis. However, InvestingPro data reveals the stock has faced headwinds, with a -17% year-to-date return and relatively weak financial health metrics. Subscribers can access 6 additional key ProTips for deeper analysis.
Evercore ISI believes Fermi has positioned itself for "an abundance of near-term catalysts" through its initial letters of intent (LOIs) and structuring agreements that provide tangible proof points, with one expected by early December as LOIs convert to firm contracts.
The firm notes that Fermi’s approach of signing LOIs to convert to firm contracts "highlights the scarcity value" of the power resources the company provides.
Evercore ISI’s $37 price target is based on applying a ~13x NTM EV/EBITDA multiple (in-line with the IPP peer group) to its 2028 EBITDA estimate, calculating an implied 2028 equity value, and then discounting that value back using a two-tiered approach.
In other recent news, Fermi has been the focus of several analyst firms initiating coverage with positive ratings. Rothschild Redburn started coverage with a Buy rating and a price target of $31.00, highlighting Fermi’s potential in providing large-scale off-grid power solutions for AI companies. Similarly, Mizuho initiated coverage with an Outperform rating and a $27.00 price target, noting the company’s plans to deliver significant power capacity to data centers over the next decade. UBS also gave a Buy rating with a $30.00 price target, emphasizing Fermi’s growth potential in power generation and data centers. Stifel joined the list with a Buy rating and a $29.00 price target, basing their analysis on a long-term financial model. Additionally, Fermi’s recent IPO was notably successful, with the stock experiencing a 55% gain on its first day of trading. The company continues to gain momentum in the market, following its strong debut. These developments reflect growing investor interest and confidence in Fermi’s future prospects.
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