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Target Price Boosted 160% on Nuclear Power Co.
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This developer of nuclear microreactors has experienced "solid momentum" since its initial public offering last month, noted a Benchmark Co. report.

Because the stock of Nano Nuclear Energy Inc. (NNE:NASDAQ) rose about 400% since going public at US$4 per share last month, spurred by two developments, The Benchmark Co. increased its price target on the company to US$39 per share from US$15, reported analyst Michael Legg in a June 25 research note.

"Our new net asset value calculation benefits from the stock's recent appreciation with the increased share price offsetting previous dilution in our model," Legg wrote.

The new target, the analyst explained, is derived from Benchmark's net present value analysis of Nano Nuclear out to 2042, with a 25% discount applied.

"Our share count increases to 38 million (38M) shares from 29M today, factoring in equity raises over the next five years," the analyst wrote. "Should the company receive government grants, our share count assumptions could prove conservative."

89% potential return

In comparison to the US$39 per share price target, the U.S.-based nuclear energy company is trading at about US$20.87, noted Legg. From this price, the return to target, or potential gain for investors, is 89%.

Catalysts for the stock, he pointed out, are further operational success and increased knowledge and demand for small modular nuclear reactors.

Nano Nuclear remains Buy-rated.

Recent positive events

The energy company is developing two clean energy, portable microreactors named ODIN and ZEUS and building out a related supply chain.

Earlier this week, Legg reported, Nano Nuclear announced it acquired the intellectual property for the annular linear induction pump (ALIP) technology, used in small nuclear reactor cooling and heat transfer. The developer will apply the ALIP technology, which employs electromagnetic pumps versus physical pumps, to ODIN to further optimize this microreactor.

Also positive for the company and its stock was the passage last week of the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act by the U.S. Senate. The law aims to facilitate the domestic development of advanced nuclear reactors.

"We believe this passing is further justification that nuclear is needed to reach climate initiatives, as nuclear is the only large-scale, reliable, emission-free energy source," Legg commented.

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Important Disclosures:

  1. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  2.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Benchmark, Nano Nuclear Energy Inc., Jue 25, 2024

Analyst Certification The Benchmark Company, LLC (“Benchmark”) analyst(s) whose name(s) appears on the front page of this research report certifies that the recommendations and opinions expressed herein accurately reflect the research analyst's personal views about any and all of the subject securities or issues discussed herein. Furthermore, no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the research analyst(s) in this research report.

Benchmark Disclosures as of June 25, 2024

1. In the past 12 months, Benchmark and its affiliates have received compensation for investment banking services from the subject company. 2. In the past 12 months, Benchmark and its affiliates have managed or co-managed a public offering of securities for the subject company. 3. Benchmark and its affiliates expect to receive or intend to seek compensation for investment banking services from the subject company in the next three months.

Investment Risk Risks include the inability to source capital and fund NNE's buildout, the need to secure government permits related to nuclear power, loss of key management, unproven technologies at scale, larger well financed competition, and unforeseen regulations. 

Valuation Methodology Our target price of $39 is based on our NPV analysis built out to 2042 utilizing a 25% discount rate. Our share count increases to 55mm shares from 29mm today, factoring in equity raises over the next 5 years. Should the company receive government grants, our share count assumptions could prove conservative. We believe the stock will benefit from increased knowledge and proliferation of demand for SMRs as safety and use cases gain public acceptance as climate change initiatives favor emission free energy and see such as key catalysts for the stock alongside continued operational progress.

General Disclosures The Benchmark Company, LLC. (“Benchmark” or “the Firm”) compensates research analysts, like other Firm employees, based on the Firm’s overall revenue and profitability, which includes revenues from the Firm’s institutional sales, trading, and investment banking departments. No portion of the analyst’s compensation is based on a specific banking transaction. Analyst compensation is based upon a variety of factors, including the quality of analysis, performance of recommendations and overall service to the Firm’s institutional clients. 

This publication does not constitute an offer or solicitation of any transaction in any securities referred to herein. Ratings that use the “Speculative” risk qualifier are considered higher risk. Any recommendation contained herein may not be suitable for all investors. The Benchmark Company, LLC makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. We have no obligation to disclose when information in this report changes apart from when we intend to discontinue research coverage of a subject company. Although the information contained in the subject report has been obtained from sources, we believe to be reliable, its accuracy and completeness cannot be guaranteed. This publication and any recommendation contained herein speak only as of the date hereof and are subject to change without notice. The Benchmark Company, LLC and its affiliated companies and employees shall have no obligation to update or amend any information herein. This publication is being furnished to you for informational purposes only and on the condition that it will not form a primary basis for any investment decision. Each investor must make its own determination of the appropriateness of an investment in any securities referred to herein based on the legal, tax and accounting considerations applicable to such investor and its own investment strategy. By virtue of this publication, none of The Benchmark Company, LLC or any of its employees shall be responsible for any investment decision. This report may discuss numerous securities, some of which may not be qualified for sale in certain states and may therefore not be offered to investors in such states. The “Recent Price” stated on the cover page reflects the nearest closing price prior to the date of publication. For additional disclosure information regarding the companies in this report, please contact The Benchmark Company, LLC, 150 East 58th Street, New York, NY 10155, 212-312-6770. The Benchmark Company, LLC is not in any way affiliated with or endorsed by the Menlo Park, California venture capital firm Benchmark Capital. This report may not be reproduced, distributed, or published without the prior consent of The Benchmark Company, LLC. Copyright © 2024. All rights reserved by The Benchmark Company, LLC.

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