Citi reiterated its "Sell/High Risk" rating on small modular reactor company NuScale Power (SMR.US) and drastically cut its price target from $37.50 to $18.50, citing contract uncertainties and revenue pressures. Analyst Vikram Bagri noted that while NuScale holds a significant regulatory approval and timing advantage as the only U.S. Nuclear Regulatory Commission-approved small modular reactor designer, benefiting from growing power demand driven by data centers and AI, the company still faces major project execution risks. Bagri highlighted that NuScale's stock appears to have prematurely priced in substantial capacity expectations before 2040, which doesn't align with projected global nuclear capacity growth.

The analyst acknowledged potential short-term catalysts that could lift the stock but warned of persistent revenue challenges in the long run. Existing contract-related revenues are declining, while partner Fluor (FLR.US) continues to reduce its stake for cash, and NuScale may need additional equity issuance to meet payment obligations. Bagri also pushed back the expected sale timeline for NuScale's first reactor module by two years and expressed skepticism about near-to-medium-term contract certainty with the Tennessee Valley Authority. NuScale shares closed down 4.69% on Wednesday.