TD Cowen has revised its recommendation on NuScale Power, moving the stock from Buy to Hold. The change reflects heightened risk linked to an upcoming shareholder vote at Nuclearelectrica - the Romanian state-controlled utility that is the customer for NuScale's small modular reactor (SMR) project at Doicesti. Nuclearelectrica is scheduled to vote on the project's final investment decision on Feb 12-13.
Although TD Cowen still expects the Doicesti SMR project to advance, the brokerage says recently negotiated approval terms place more responsibility on NuScale for module performance and shift the likely timeline for commercial operations. Under the updated schedule provided to investors, the first NuScale Power Module is now forecast to enter commercial operation in July 2033, with the entire six-module plant expected to be online by December 2034. The project had previously been discussed as targeting a 2030 start.
TD Cowen highlighted that Doicesti is presently the only project in active front-end engineering and design (FEED) that is using NuScale technology. That status gives Doicesti particular significance as a test of NuScale's commercial viability, the brokerage said, noting that an earlier U.S. project which reached a similar FEED stage was later cancelled.
The revised commercial terms outlined by TD Cowen include two possible procurement structures. In one scenario, the Romanian project company would acquire the first NuScale Power Module while NuScale would remain responsible for the remaining five modules until the initial unit reaches full operation. In the alternative scenario, the purchaser would buy all six modules up front but NuScale would be contractually required to reimburse the cost of five modules if the first module fails to perform as designed. TD Cowen observed that the increased exposure appears to be concentrated on the reactor modules themselves rather than on the broader plant construction scope.
On the company's short-term finances, TD Cowen assessed the impact as limited. NuScale reported roughly $750 million in cash and investments at the end of its third fiscal quarter, preceding an updated at-the-market financing facility announced in November. Separately, NuScale remains contractually obligated to pay Entra1 $495 million under an earlier milestone agreement.
Given the early stage of NuScale's commercial deployment and the new contractual dynamics with Doicesti, TD Cowen declined to publish a price target for the company. The brokerage warned that while near-term financial exposure is modest, the added performance risk tied to the initial module could become materially significant if that unit does not operate to specification.
Key dates and numbers from TD Cowen's assessment:
- Nuclearelectrica shareholder vote on Doicesti final investment decision - Feb 12-13.
- First NuScale module commercial operation - expected July 2033.
- Full plant commercial operation - expected December 2034 (previously discussed target: 2030).
- NuScale cash and investments at end of Q3 - about $750 million.
- Obligation to Entra1 tied to earlier milestone agreement - $495 million.