Last Update 11 Dec 25

Fair value Increased 1.88%

LEU: Federal Funding And Equity Dilution Will Shape Future Expansion Balance

Analysts have nudged their price target for Centrus Energy modestly higher to approximately $280 from about $275, reflecting improved profitability expectations and a still constructive long term thesis, despite trimmed Street targets amid a tougher global demand backdrop and dilution considerations.

Analyst Commentary

Street research on Centrus Energy reflects a more nuanced stance, with tempered price targets but generally supportive views on the company’s long term positioning and execution potential.

Bullish Takeaways

Bullish analysts highlight that, despite recent target cuts, implied upside to current trading levels remains meaningful, supported by strengthening long term market fundamentals for nuclear fuel.
Some see the recent share price pullback following muted quarterly results as a buying opportunity, arguing that the structural demand outlook for enrichment capacity and Centrus’s strategic role in the supply chain still justify a premium valuation.
The at the market equity program and associated dilution are viewed by bullish analysts as enabling Centrus to fund growth and capture incremental Department of Energy and commercial opportunities that could expand earnings power over time.
Supportive commentary points to the company’s ability to navigate a challenging macro commodity backdrop, with potential demand rebounds in the U.S. and Europe helping to offset weakness tied to slower growth in China.

Bearish Takeaways

Bearish analysts emphasize that repeated price target reductions, including from major firms like JPMorgan, reflect execution risk after muted quarterly performance and uncertainties around the pace of earnings growth.
Concerns persist around dilution from the $1B at the market program, which could weigh on per share valuation metrics and limit near term multiple expansion even if underlying fundamentals improve.
Some note that the macro backdrop remains challenging, with softer commodity demand from China potentially capping upside to near term pricing assumptions across the broader sector.
There is caution that delays or ambiguity in timing of Department of Energy allocations and other key contracts could create volatility around forward estimates and temper investor conviction in the growth trajectory.

What's in the News

U.S. Department of Energy chief of staff Carl Coe outlined plans for the government to buy and own as many as 10 large nuclear reactors, signaling a major federal push into nuclear power markets that could benefit nuclear fuel suppliers such as Centrus Energy (Bloomberg)
Centrus Energy completed an at the market follow on equity offering totaling approximately $196.6 million in Class A common stock, providing additional capital to support growth initiatives and potential capacity expansion
The company filed for an additional at the market follow on equity offering of up to $1 billion in Class A common stock, underscoring an aggressive funding strategy for expansion and strategic projects
Centrus announced plans for a major expansion of its uranium enrichment plant in Piketon, Ohio, a potential multi billion dollar public and private investment that could add thousands of centrifuges, boost LEU and HALEU output, and create hundreds of new jobs, contingent on Department of Energy funding decisions

Valuation Changes

Fair Value: nudged higher from about $275 to roughly $280 per share, reflecting slightly stronger profitability assumptions.
Discount Rate: effectively unchanged at about 7 percent, indicating a stable risk profile and cost of capital outlook.
Revenue Growth: trimmed modestly from approximately 11.8 percent to about 11.1 percent annually, signaling slightly more conservative top line expectations.
Net Profit Margin: raised meaningfully from roughly 11.1 percent to about 13.9 percent, pointing to improved operating leverage and earnings efficiency in the model.
Future P/E: reduced from about 104.6x to roughly 87.3x, suggesting a less aggressive valuation multiple despite the higher fair value estimate.

High expectations for rapid growth rest on favorable policies and shifting uranium supply but face execution, regulatory, and funding risks that could pressure margins and sales.
Overestimated utility contract momentum and uncertainty from emerging competing technologies threaten long-term demand and revenue visibility.
Centrus is positioned for sustained growth and margin expansion, leveraging unique market leadership, strong contractual backlog, and strategic investments amid favorable nuclear industry trends.

Catalysts

About Centrus Energy

Supplies nuclear fuel components for the nuclear power industry in the United States, Belgium, Japan, the Netherlands, and internationally.What are the underlying business or industry changes driving this perspective?

Investors appear to be pricing in significant, multi-year revenue and earnings growth premised on a rapidly expanding addressable market for both LEU and HALEU due to a highly supportive policy environment (federal and state backing of nuclear, AI-driven electricity demand, and reshoring of uranium supply). If these expectations do not materialize as quickly or as strongly as assumed-due to industry or regulatory delays-future revenue and EBITDA could fall short of implied growth rates.
The current valuation assumes Centrus will rapidly scale capacity to meet rising demand just as Russian supply exits the Western market; however, timelines for building new cascades are long (first cascade takes 42 months, subsequent cascades take months each) and highly dependent on the allocation and timing of DOE funding. Any holdup in these government awards or in private capital inflows could lead to prolonged periods of underutilized cash, lower revenue, and diminished operating leverage, thus pressuring future margins and earnings.
Investors may be overestimating the pace and stickiness of government and utility contracting for enrichment services, supported by expectations of premium pricing and long-term deals as Western utilities diversify from Russian supply. Should utilities delay or limit their contracting activity-or revert to shorter-term or contingent contracts-backlog growth and forward revenue visibility could stall, ultimately impacting projected sales growth and backlog conversion.
There is an expectation embedded in the stock that the accelerating global decarbonization trend will drive a nuclear "renaissance, but advances in renewables, storage, and distributed energy could cap or even reduce medium
and long-term nuclear deployment. If non-nuclear alternatives scale faster than utility planning assumes, Centrus' long-term volume opportunity (and thus revenue growth) could be materially lower than anticipated.
The market seems to be capitalizing Centrus as a clear winner and technology leader in HALEU and domestic uranium enrichment, but execution risk remains (manufacturing/manpower ramp, contract negotiations, and regulatory/permitting). Delays or cost overruns in commercializing next-gen enrichment, or higher-than-expected compliance/operational costs, could drive down net margins and erode earnings, especially given current high expectations for margin expansion.

Centrus Energy Earnings and Revenue Growth

Centrus Energy Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Centrus Energy's revenue will grow by 13.6% annually over the next 3 years.
Analysts assume that profit margins will shrink from 24.0% today to 11.0% in 3 years time.
Analysts expect earnings to reach $70.3 million (and earnings per share of $3.89) by about August 2028, down from $104.8 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $112.7 million in earnings, and the most bearish expecting $18.8 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 87.7x on those 2028 earnings, up from 36.3x today. This future PE is greater than the current PE for the US Oil and Gas industry at 13.2x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.92%, as per the Simply Wall St company report.

Centrus Energy Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Robust long-term demand for nuclear fuel is being driven by bipartisan government policies, private sector investments, and the global energy transition, positioning Centrus Energy to benefit from secular tailwinds that could fuel sustained revenue growth.
Centrus' unique first-mover advantage as the only publicly traded, proven American enricher-particularly in HALEU production-could lead to multi-year national security and commercial contracts, supporting long-term predictability and potentially higher margins and earnings.
The company's substantial $3.6 billion backlog through 2040, including $1.8 billion in definitive LEU agreements and clear ongoing progress in securing additional commitments, offers significant visibility on future revenues beyond near-term fluctuations.
Operational leverage from scaling up enrichment and cost efficiencies evidenced by rising gross margins (35% vs. 19% YoY) suggest the potential for ongoing margin and earnings expansion as production ramps to meet market needs.
Strengthened by a robust cash position ($833M as of Q2 2025), active investment in supply chain and technology, and increasing access to both government funding (i.e., the $3.4B DOE allocation) and private capital, Centrus is well equipped to fund growth initiatives, which can support long-term revenue, profitability, and competitive positioning.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $229.3 for Centrus Energy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $310.0, and the most bearish reporting a price target of just $108.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $640.9 million, earnings will come to $70.3 million, and it would be trading on a PE ratio of 87.7x, assuming you use a discount rate of 6.9%.
Given the current share price of $208.67, the analyst price target of $229.3 is 9.0% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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