Stock market today: Stocks fall as investors rotate out of tech into Jackson Hole
On Monday, Texas Capital Securities maintained a Buy rating on NET Power Inc. (NYSE: NPWR), with a steady price target of $24.00, following the company’s latest earnings release and call. The analyst underscored the mixed outcomes, acknowledging both achievements and setbacks. According to InvestingPro data, analyst targets for NPWR range from $11 to $30, with the stock currently trading significantly below its 52-week high after a 34.56% decline year-to-date.
NET Power completed the Front End Engineering Design (FEED) study for Project Permian in the fourth quarter of 2024, confirming the project’s design integrity. Additionally, the La Porte validation campaign marked several milestones in its first phase, which is essential for validating the technology at a utility scale. The company also initiated a study to explore the feasibility of modular multi-unit designs to potentially reduce costs. With a market capitalization of $1.49 billion and a strong liquidity position evidenced by a current ratio of 20.96, the company maintains financial flexibility for its development plans.
However, the initial cost estimate for Project Permian has substantially increased to between $1.7 billion and $2.0 billion, up from the previous estimate of approximately $1.1 billion. The anticipated operational date for Project Permian has also been pushed back to 2029, later than the previously forecasted second half of 2027 to the first half of 2028.
Despite the absence of technological issues in the FEED study, the heightened costs pose a challenge to the commercial viability of Project Permian without cost reductions. The analyst noted that many of the cost increases are tied to site-specific factors, which could be mitigated in future projects. The NET Power team has identified opportunities to reduce costs with minimal impact on performance.
The analyst concluded that NET Power’s technology is vital for generating clean, reliable power. Even with the rising costs associated with the first-of-its-kind plant, the expectation is that the technology will be significant in addressing future electricity demand. InvestingPro subscribers can access 12 additional investment tips and a comprehensive analysis of NPWR’s financial health, including detailed profitability metrics and growth prospects. Get the full picture with InvestingPro’s exclusive Research Report, part of our coverage of over 1,400 US stocks.
In other recent news, Net Power Inc. reported a significant fourth-quarter adjusted loss of $0.67 per share, which was considerably wider than the analyst estimates of a $0.12 per share loss. This development was accompanied by the announcement of delays in their first utility-scale project, Project Permian, located in West Texas. The company completed the Front-End Engineering and Design for this project but discovered that cost estimates were much higher than anticipated, leading to a pause in long-lead equipment orders and the initiation of a cost optimization process. Net Power now estimates the total installed cost for Project Permian to be between $1.7 billion and $2.0 billion, with the plant expected to come online no earlier than 2029. To address these financial challenges, the company has launched a feasibility study for a modular multi-unit plant design and is exploring coastal-based locations for future deployments. Despite these setbacks, Net Power ended 2024 with $533 million in cash and investments, a slight decrease from the previous quarter. The company spent $13 million on operations and $29 million on capital expenditures during the fourth quarter. CEO Danny Rice expressed confidence in the company’s liquidity, stating that they are well-positioned to advance their technology and optimize plant design.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.