Wajeeh Khan
2 min read
In This Article:
Centrus Energy (LEU) shares inched up on Friday after the nuclear energy company secured an extension on its government contract to produce High-Assay, Low-Enriched Uranium (HALEU).
LEU’s press release valued the one-year extension at about $110 million, adding that the Department of Energy (DOE) has the option to extend that contract for up to eight more years.
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Including today’s gain, Centrus Energy stock is up more than 280% versus its low set in early April.
The HALEU contract extension is rather meaningful for Centrus Energy stock as it ensures continued visibility into future revenues.
Additionally, this government extension reinforces the clean energy firm’s pivotal role in restoring the country’s ability to enrich uranium (UXM25) as well.
With up to eight additional years of production still on the table, the DOE deal positions LEU as a long-term strategic partner in fueling next-generation nuclear reactors.
As global interest in clean, secure energy intensifies, partly due to rapidly increasing demand from AI – Maryland-based Centrus stands to benefit from both commercial and national security-driven demand for HALEU.
That makes LEU shares more attractive for long-term growth investors.
Despite its meteoric run in recent months, Evercore ISI analysts are convinced that Centrus Energy stock has further room to the upside.
Earlier this week, the investment firm reiterated its “Outperform” rating on the clean energy stock and raised its price target to $205, which indicates potential upside of another 8.5% from current levels.
Evercore ISI remains positive on LEU shares mostly because Centrus is the only company that the Nuclear Regulatory Commission has licensed so far for HALEU production.
According to its analysts, the U.S. must “unleash its advanced nuclear energy” to win the AI race.
Other Wall Street analysts are nowhere near as constructive on LEU stock as Evercore ISI since it’s already pricing in a lot of the good news.
While the consensus rating on Centrus Energy remains at “Strong Buy,” the mean target of about $157 indicates potential “downside” of as much as 17% from here.
