NuScale Power shares dropped 13.5% through 2 p.m. ET Friday after UBS analyst Jon Windham cut the stock from neutral to sell and slashed his price target to $6. Windham points to a slow construction timeline and a lack of signed customers, while estimates of NuScale's cash burn through 2028 range from $700 million to $1 billion.
NuScale Power stock crashed 13.5% through 2 p.m. ET Friday, and UBS is the reason why. Swiss bank UBS downgraded NuScale from neutral to sell this morning, in a note covered on StreetInsider.com.
UBS slashes its price target to $6
Analyst Jon Windham had NuScale rated neutral with a $10 price target as recently as yesterday. Revisiting that valuation this morning, Windham cut his target to $6 on a stock that had closed near $8.80. He argues NuScale's competitors are approaching the point where they can begin building nuclear power plants, but NuScale is falling behind. According to Windham: "NuScale's estimated 5+ year build timeline and lack of firm customer commitments" leave it lagging the field. In his best case, Windham thinks NuScale might begin just one construction project by 2028.
Cash burn could reach $1 billion before revenue arrives
The bigger problem is cash. UBS estimates NuScale will post $700 million in negative free cash flow from 2026 through 2028, consuming roughly 65% of its cash on hand. Other analysts see it worse: a poll by S&P Global Market Intelligence puts 2026-2028 cash burn closer to $1 billion, a figure that would leave NuScale's coffers nearly empty.
Windham does expect conditions to improve by 2028, with revenue rising from $11 million today to $185 million. But NuScale has to survive the cash crunch first.
Source: The Motley Fool
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