Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 23 May, 25 | LEU | Speculative Buy | USD 108.9 | USD 119.0 | USD 125.0 | 4 days | 14.8% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Centrus Energy Corp. supplies nuclear fuel and services for the nuclear power industry in the United States, Japan, Belgium, and internationally. The company operates through two segments, Low-Enriched Uranium (LEU) and Technical Solutions. The LEU segment sells separative work units (SWU) component of LEU; SWU and natural uranium components of LEU; and natural uranium for utilities that operate nuclear power plants. The Technical Solutions segment offers technical, manufacturing, engineering, procurement, construction, and operations services to public and private sector customers, including the American Centrifuge engineering and testing activities. The company was formerly known as USEC Inc. and changed its name to Centrus Energy Corp. in September 2014. Centrus Energy Corp. was incorporated in 1998 and is headquartered in Bethesda, Maryland.
Gross Profit Surge: Overall gross profit rose by $28.6 million (665%), with LEU gross profit increasing by over $30.7 million (6,140%)
Revenue Growth: Total revenue increased by 67% year-over-year, with the LEU segment growing by 117%
IRA-Linked Funding at Risk: $700 million in congressional appropriations, part of the $3.4 billion federal backing, is currently paused pending review under Executive Order 14154
Technical Solutions Margin Decline: Gross profit in the Technical Solutions segment fell by $2.1 million (55%)
Centrus faces a material risk due to its dependence on federal appropriations and contract task orders, particularly funding currently under review, which could delay or limit the execution of its long-term growth strategy in HALEU and LEU production
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 108.9 | 102.0 | 119.0 | 125.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Financial Performance in Q1 2025
Centrus Energy Corp delivered robust financial results for the first quarter of 2025. The company reported total revenue of $73.1 million, reflecting a 67% increase compared to $43.7 million in the same period in 2024. The Low-Enriched Uranium (LEU) segment drove the growth, generating $51.3 million in revenue—an increase of $27.7 million, or 117%, from the prior year. The increase was attributed to a 46% rise in the average price of Separative Work Units (SWU) sold and a 49% growth in volume. Meanwhile, the Technical Solutions segment contributed $21.8 million, up 8% year-over-year due primarily to progress under the HALEU Operation Contract.
Improved Profitability Driven by LEU Segment
Centrus recorded a gross profit of $32.9 million in Q1 2025, a substantial rise from $4.3 million in Q1 2024, marking an increase of $28.6 million or 665%. The LEU segment accounted for most of this improvement, delivering a gross profit of $31.2 million compared to $0.5 million the previous year—an increase of over 6,100%. The profit surge was due to higher SWU sales volumes and a more favorable mix of customer contracts. However, the Technical Solutions segment posted a gross profit of $1.7 million, a 55% decline from $3.8 million in Q1 2024, mainly due to increased costs related to the HALEU contract and a delay in fee recovery for work done after a contractual extension.
Active Role in Domestic Enrichment Initiatives
Centrus continues to play a critical role in U.S. nuclear fuel supply security through its HALEU enrichment operations at the American Centrifuge Plant in Piketon, Ohio. As of March 31, 2025, the company had delivered approximately 670 kilograms of HALEU uranium hexafluoride (UF6) to the U.S. Department of Energy (DOE). The DOE extended Phase 2 of the HALEU Operation Contract through June 30, 2025, raising the contract’s total value to $152.3 million. Centrus’ operations remain unaffected by tariffs and are backed by U.S.-owned technology and supply chains, which the company highlights as key competitive advantages in the geopolitical context of nuclear fuel production.
Federal Contracts and Appropriations
Centrus was selected under several DOE solicitations related to HALEU and LEU production. The HALEU Deconversion and HALEU Production Contracts have maximum potential values of $0.8 billion and $2.7 billion, respectively, across all awardees. The LEU Production Contract, extending over ten years, carries a potential maximum value of $3.4 billion. In April 2025, Centrus received a time-and-materials task order worth up to $0.5 million under the LEU Enrichment Contract. However, funding under the Inflation Reduction Act (IRA), including $700 million earmarked for domestic nuclear initiatives, is under executive review per Executive Order 14154, introducing uncertainty regarding future allocations.
Balance Sheet Strengthened via Debt Retirement
Centrus successfully redeemed all outstanding 8.25% Notes due in 2027 on March 26, 2025. The $74.3 million aggregate principal amount was repaid at par, along with accrued interest. The company recognized a gain of $11.8 million from the early extinguishment of this long-term debt, effectively strengthening its balance sheet and reducing future interest obligations.
Growing Backlog and Long-Term Visibility
As of March 31, 2025, Centrus held a backlog totaling $3.8 billion, extending through 2040. The LEU segment backlog stood at $2.8 billion, which includes $2.1 billion in contingent sales commitments—$1.7 billion of which are under definitive agreements. These commitments are largely dependent on Centrus' ability to secure substantial public and private investment. The Technical Solutions segment contributed $0.9 billion to the backlog, composed of both funded and unfunded amounts, along with unexercised contractual options. This sizeable backlog reflects long-term revenue visibility, especially under medium- and long-term contracts with fixed commitments.
Technical Commentary:
LEU's stock price showed resilience at lower levels and steadily advanced, pointing to a potential upward trend in the near term. The 14-period RSI is trending upward, reflecting strong momentum and increased buying interest. Additionally, the stock remains above its 21-day Simple Moving Average, and a golden cross has formed on the daily chart of its key moving averages, further supporting the prospect of near-term gains. These moving averages are expected to serve as support levels moving forward.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Centrus Energy Corp. (NYSE: LEU) at its current market price of USD 108.90 as of May 23, 2025 (7:25 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Uranium
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LEU Centrus Energy |
-0.1 0.08% | 123.40 | 17.25 | 19.12 | 2.42 | - | 2.33 | 12.71 |
| CCJ Cameco Corp |
-1.365 2.31% | 57.78 | 125.05 | 57.80 | 6.80 | 4.81 | 9.68 | 41.12 |
| NATKY JSC National Atomic Company Kazatomprom |
1.62 4.44% | 38.14 | 14.26 | 15.75 | 0.0096 | 3.56 | 0.0093 | 0.02 |
| SRUUF Sprott Physical Uranium Trust |
-0.347 2.10% | 16.18 | 25.19 | 13.00 | 636.01 | 1.79 | 1968.60 | -177.8571 |
| NXE NexGen Energy Ltd. |
-0.135 2.18% | 6.07 | - | - | - | 7.30 | -31.2142 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
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Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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