The nuclear energy sector has been a winner across the very recent past, following Wednesday's news that an important company in the industry had been tapped for an upcoming government project.
Centrus Energy (LEU 2.42%) wasn't that company, but it's a key supplier to the enterprise that's at the heart of the project. Additionally, Centrus was the subject of a bullish new analyst note. With these tailwinds at its back the company's share price had heated up by nearly 11% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence.
The right supplier at the right time
The company bagging the contract was Centrus' business partner, next-generation nuclear energy specialist Oklo, which is on tap to build and operate one of its facilities to power Eielson Air Force base in Alaska.
Image source: Getty Images.
That's also a win for Centrus, as it is a supplier of the high-assay low-enriched uranium (HALEU) that will fuel Oklo's powerhouse. The two companies have a memorandum of understanding (MOU) in place for the supply of the fuel.
While most of the investor excitement following the project's announcement was directed at Oklo, Centrus also received a boost due to the relationship with its peer. Additionally, becoming a crucial supplier to a branch of the military will greatly help boost Centrus' status as a go-to nuclear energy supplier.
A good start to the week
Even before Oklo's news hit the headlines, Centrus was already on a bullish path. On Monday, Evercore ISI analyst Nicholas Amicucci reiterated his outperform (i.e., buy) recommendation on the stock, and his $145-per-share price target. As of press time, there was no word on whether the pundit had updated his take on Centrus following the Oklo development.
Nuclear energy is enjoying quite the sudden revival in the U.S. and as long as it follows an upward trajectory, Centrus is sure to benefit from it. This is undoubtedly a stock to watch.
