William Blair starts nuclear energy stocks BWXT, LEU, OKLO at Outperform

Investing.com -- William Blair initiated coverage on three nuclear energy stocks—BWX Technologies Inc (NYSE:BWXT), Centrus Energy (NYSE:LEU), and Oklo Inc (NYSE:OKLO) —with Outperform ratings, citing a favorable policy backdrop, technological advantages, and strong market positioning within the nuclear supply chain and small modular reactor (SMR) ecosystem.

In a Monday note, BWXT is described as “leveraged to the nuclear supply chain with a CANDU attitude.” The company holds a strong position in Canada’s CANDU reactor fleet and is a key supplier to the U.S. Navy’s nuclear fleet.

William Blair sees significant upside from BWXT’s involvement in commercial SMRs and early contract wins with GE Hitachi (OTC:HTHIY) and Westinghouse.

The brokerage believes BWXT “will be a large beneficiary of the nuclear renaissance.” It assigns a fair value estimate of $173 per share, implying over 40% upside from current levels.

Centrus Energy is the only U.S.-owned uranium enricher, uniquely positioned to supply both low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU) domestically.

“Centrus holds one of two Nuclear Regulatory Commission (NRC) licenses for LEU and the only license for HALEU,” the analysts led by Jed Dorsheimer highlighted.

They also pointed to the company’s role in reducing U.S. reliance on Russian enrichment capacity, estimating a $15 billion total addressable market (TAM) driven by a projected 13-fold increase in separative work units (SWU) demand by 2050.

William Blair’s base-case valuation implies a fair value of $185 per share, representing a 45% upside from current levels.

Lastly, Oklo is pioneering a vertically integrated model with its Aurora powerhouse SMRs, aiming to “build, own, and operate” rather than sell designs.

This model provides “a fast-tracked regulatory pathway called a custom combined construction and operating license approval (COLA)” and allows Oklo to capture upside from rising electricity prices, especially from premium clean energy PPAs.

William Blair sees the company well-positioned for accelerated SMR deployment and forecasts up to 7.5 GW of installed capacity by 2040 in its base-case scenario. The broker values OKLO at $70 per share, which implies around 30% upside potential. 

All three stocks are expected to benefit from the Trump administration’s recent nuclear-focused executive orders, which William Blair describes as “the most consequential shift in energy policy of our lifetime.”