NuScale Power (SMR) Stock Surges 12% Pre-Market on Bank of America Upgrade

TLDR

• BofA Securities upgraded NuScale Power (NYSE:SMR) from Underperform to Neutral but cut its price target from $34 to $28
• The stock has dropped approximately 60% from its peak after the TVA announcement and 44.5% over the past six months
• BofA cited funding mismatches, higher cash needs, and dilution concerns as key factors affecting near-term outlook
• The U.S. Nuclear Regulatory Commission approved NuScale’s uprated 77 MWe reactor design in May 2025
• Tennessee Valley Authority signed a deal with ENTRA1 Energy in September 2025 to deploy up to 6 GW using NuScale’s technology

NuScale Power shares jumped over 12% in Friday’s premarket trading after BofA Securities changed its rating on the stock. The upgrade came after the stock fell roughly 9% over the previous month.

NuScale Power Corporation, SMR

BofA Securities moved NuScale Power from Underperform to Neutral. However, the firm also reduced its price target to $28 from $34. The new target represents a 42% potential gain from Thursday’s closing price of $19.67.

The rating change reflects the stock’s steep decline from its post-TVA announcement high. Analyst Dimple Gosai noted that the approximately 60% correction has brought the valuation down to a level that better matches current challenges.

Over the past six months, the stock has fallen 44.5%. But the shares have bounced back recently with a 20.6% gain in the past week.

BofA identified several issues in its analysis. The firm pointed to a funding and timing mismatch in the ENTRA1 Partnership Milestones Agreement. Higher near-term cash requirements also raised concerns. The analyst noted that dilution is accelerating before the company starts generating revenue from original equipment manufacturer sales.

Despite these concerns, NuScale maintains a solid balance sheet. The company holds more cash than debt and has a current ratio of 1.62. This means its liquid assets exceed short-term obligations.

Regulatory Approval and TVA Deal

The U.S. Nuclear Regulatory Commission approved NuScale’s uprated reactor design in May 2025. The company had revised its power module capacity upward to 77 megawatt-electric from the original 50 MWe design.

This approval marked a milestone for the company. NuScale’s uprated power module became the second small modular reactor design to receive NRC approval.

In September 2025, the Tennessee Valley Authority entered into an agreement with ENTRA1 Energy. The deal involves deploying nuclear power capacity of up to six gigawatts using NuScale’s SMR technology.

BofA stated that the derisked Light-Water Reactor design and the TVA licensing agreement strengthen NuScale’s credibility. The firm also noted it now views NuScale’s deployments closer to its base case scenario.

Near-Term Outlook

BofA Securities maintained its long-term deployment view of approximately 18 GW cumulative through 2040 for small modular reactors. The analyst emphasized that the upgrade doesn’t represent a change in their long-term SMR outlook.

Instead, the firm acknowledged that near-term cash flow patterns and equity overhang keep the risk/reward profile balanced. BofA added that limited contract visibility caps the upside for the stock in the near term.

The company recently initiated a $750 million at-the-market equity offering program. The offering allows NuScale to sell shares of its Class A common stock through several sales agents including UBS Securities LLC and TD Securities (USA) LLC.

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