NuScale (SMR) Extends Losses on ‘Sell’ Reco

Core Insights - NuScale Power Corp. (NYSE:SMR) has experienced a significant decline in stock performance, dropping 13.21% to close at $38.37, marking its fourth consecutive day of losses due to a rating downgrade and news of its largest shareholder planning to sell additional stakes [1][4] - Citigroup has issued a "sell" recommendation for NuScale with a price target of $37.50, citing negative catalysts such as Fluor Corp.'s divestment and intense competition in the market [2][4] - The current share price reflects an optimistic expectation of NuScale's ability to build 16 GW of reactors by 2040, while the total installation forecast for the US is 56 GW, indicating that market expectations may be overly optimistic given the lack of confirmed customers [3][4] Company Performance - NuScale's stock has been negatively impacted by external factors, including a downgrade from Citigroup and the potential sale of shares by its largest shareholder, which has contributed to a decline in investor sentiment [1][2] - The company is perceived to be overly reliant on its active projects without having material near-term customers, which raises concerns about its capital needs and the timeline for achieving its goals [4] Market Outlook - The market is currently pricing in a level of optimism regarding NuScale's market share that may not be justified, especially in light of the competitive landscape and the absence of confirmed customer contracts [3][4] - While there is potential for investment in NuScale, other sectors, particularly AI stocks, are viewed as having greater promise for higher returns with limited downside risk [5]