Why Is Centrus Energy Corp Stock Rising Today?

Centrus Energy began manufacturing centrifuges domestically to support commercial production of low-enriched uranium at its Piketon facility in Ohio.

• The company plans to use its uranium enrichment expansion to support a $2.3 billion backlog of uranium contracts from domestic and international customers.
• The company recently raised $1.2 billion in convertible notes and launched a $1 billion at-the-market offering to fund expansion.
• Evercore reiterated an ‘Outperform’ rating on the stock and maintained a $390 price target.

Shares of Centrus Energy Corp. (LEU) jumped 15% on Friday after the company said it has begun manufacturing centrifuges domestically, a step Wall Street views as a move to capitalize on its “first-mover advantage.”

The company said the manufacturing activity will support commercial production of low-enriched uranium (LEU) at its Piketon facility in Ohio. The company plans to use its uranium enrichment expansion to support a $2.3 billion backlog of LEU contracts from domestic and international customers, and eventually scale production of high-assay LEU (HALEU).

Funding Details

Centrus’ expansion goals are backed by multiple funding channels, including Department of Energy (DOE) task orders that could total around $900 million each for LEU and HALEU production. The company has also raised $1.2 billion in convertible notes and recently launched a $1 billion at-the-market offering.

“We make this announcement after carefully evaluating the business’ internal and external progress as well as its future prospects and many competitive advantages. These include the significant progress in building our supply chain; the advancement across the many available avenues to acquire low-cost of capital to support our build, including imminent DOE funding announcements; and, evaluating the progress in our internal manufacturing capabilities,” said Amir Vexler, Centrus Energy CEO and President.

Evercore Reiterates ‘Outperform’ Rating

Evercore reiterated an ‘Outperform’ rating on the stock and maintained a $390 price target, according to The Fly. This represents a 50% upside from its current price of around $260.

The firm said Centrus Energy’s start of domestic centrifuge manufacturing is a clear signal that the company is moving to capitalize on its “first-mover advantage” in U.S. uranium enrichment.

Evercore called the decision to begin manufacturing ahead of a formal DOE allocation a “meaningful positive indicator” for the stock, reflecting confidence in Centrus’ ability to fund the build-out through multiple financing paths.

How Did Stocktwits Users React?

Despite the strong intraday gains, retail sentiment on Stocktwits remained ‘neutral’ over the past 24 hours, even as chatter was ‘high’.

Users were generally bullish, with one watcher expecting the stock to climb to $270.

Another user expects the stock to hit $300 before the year ends.

The stock has gained more than 280% in the past year. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<