Rich Smith, The Motley Fool
5 min read
In This Article:
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Investment bank Blair initiated coverage of Oklo and Centrus stocks with outperform ratings this morning.
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Argus downgraded AES to hold yesterday.
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Oklo stock is not profitable and has no revenue; Centrus has both; AES stock is the most profitable of the three, but carries a heavy debt load.
Oklo (NYSE: OKLO) stock, a start-up nuclear power company developing mini-nuclear reactors, surged more than 10% yesterday after announcing a partnership with Korea Hydro & Nuclear Power. Alongside Centrus Energy (NYSEMKT: LEU), the company has been riding an even bigger wave of investor enthusiasm that began last week, when President Trump on Friday signed a series of executive orders to promote development of the nuclear power industry in America.
Both stocks are up again modestly today, with Oklo stock rising 1.7% through 10:30 a.m. ET, and Centrus Energy stock up about twice that -- a 3.4% gain.
In contrast, electric utility AES (NYSE: AES), which does not operate nuclear power plants, seems to be missing out entirely on the nuclear stocks boom. AES stock is down 3.7% today, and down an even more dramatic 52% over the past 52 weeks.
Yesterday, Oklo said it will collaborate with its Korean partner to advance the technology of its new Aurora powerhouse, as well as Korea Hydro's own "innovative domestic advanced nuclear technology, the i-SMR." The announcement seems to have caught the attention of investment bank William Blair, which initiated coverage of Oklo stock today with an "outperform" rating.
Oklo plans to build a 75-megawatt Aurora powerhouse at the Idaho National Laboratory site, and says it has another 14 gigawatts of nuclear power plants lined up after that, in its "growing order pipeline." Blair says the company has laid out "a fast-tracked regulatory pathway called a custom combined construction and operating license approval (COLA)" that "will permit Oklo to capture upside from rising electricity prices, especially from premium clean energy PPAs," as StreetInsider.com reports today.
The analyst also likes Oklo's vertically integrated business model, in which the company intends to not only design but also build, own, and operate its own nuclear power plants.
Blair also likes Centrus Energy, but for different reasons. In today's note, the banker pointed out that Centrus currently holds one of only two Nuclear Regulatory Commission (NRC) licenses that have been issued for low-enriched uranium (LEU). Centrus holds the only NRC license issued for enriching uranium to high levels, turning it into what is called "high-assay low-enriched uranium," or "HALEU."
