Oliver Stone’s new film puts nuclear energy in the spotlight. These stocks are ready to jump on the trend
Investors are taking another look at nuclear power following a new documentary on the subject by Oliver Stone which screened in Davos. The American filmmaker known for ‘Wall Street’, ‘Platoon’ and ‘JFK’ has already tackled hot topics in his films. In his latest documentary “Nuclear Now”, Stone argues for the use of nuclear energy as an environmentally friendly alternative to fossil fuels. “It’s going to be a miserable existence if we have hurricanes, fires, increasingly severe droughts. It’s scary,” Stone said in an interview with CNBC’s Tania Bryer at the World Economic Forum in Davos, Switzerland. “We had the solution [nuclear power] …and the environmental movement, to be honest, just derailed it. I think the environmental movement has done a lot of good, a lot of good… [I’m] not hit him, but in this major case, it was wrong. It was wrong,” Stone said. For investors, the film adds to the growing interest in nuclear power as an alternative to fossil fuels beyond renewables. , has changed the outlook in the United States In fact, nuclear energy will represent 15% of the country’s energy by 2050, according to a recent note from Wells Fargo. The Wall Street firm previously forecast its share at 8%. The new estimate assumes both nuclear plants being decommissioned as they age, as well as an evolving mix of energy sources in the years to come. “We see a number of factors that make the outlook for nuclear energy optimistic for the coming years/decades as countries around the world realize the importance of having a secure source of energy. , with nuclear power being one of the preferred sources of clean energy, energy independence and security,” reads an October memo from Citi. consistent across the industry. Regulatory hurdles, as well as ongoing concerns from some environmental activists about the waste produced by the process, could impede the progress of new projects in different regions. Here are some of the companies that could Prospects brighter in the US In the US, the outlook for nuclear power has improved after the IRA Legislation would extend the life of reactors currently in service ice in the country. That would be a boon for the 93 reactors in 30 states that account for about a fifth of the nation’s total electricity, according to a Citi memo. This trend should support stocks of companies like Duke Energy, according to Citi. Duke operates about 11 nuclear units at six different sites, but Citi said the company hopes to build a small modular nuclear reactor in the Southeast and has announced other projects in Utah. These types of reactors are about one-third the size of a typical nuclear power plant and can be used in remote locations. Shares of CEG 6M mountain Constellation Energy peaked above $97 per share in late November. Wells Fargo’s top nuclear pick is Constellation Energy, which the company says would be among the biggest beneficiaries because it is the operator of the largest fleet of nuclear power plants in the United States. Shares are down about 4% year-to-date, but in the past 12 months. , the stock has almost doubled. According to FactSet, the average price target for Constellation is $99.77, which is about 20% higher than where it is currently trading. NextEra Energy is another name that Wells Fargo favors, saying it is “in a unique position to capitalize on capital investment opportunities” ahead. Nextera is diversified with units that generate electricity from various sources, including nuclear. It also provides infrastructure services needed for new energy projects. NextEra shares are down more than 8% this year, but the stock holds an average buy rating, according to FactSet. The stock’s average price target is $96.49, implying a 26% gain from its current price. Shares of NEE 6M mountain NextEra are down more than 8% so far this year, but the stock has gained nearly 2% in the past 52 weeks. Bank of America said traders investing in the nuclear energy theme could consult Public Service Electric Group, saying in an October memo that PSE&G operates unregulated nuclear plans in New Jersey and Pennsylvania, which which is “underestimated” by investors. The stock has an average overweight rating and an average price target of $67.21, according to FactSet. Shares are down more than 1% so far this year at around $60. ETFs follow the trend Meanwhile, global nuclear power exchange-traded funds are seeing renewed investor interest in the first weeks of 2023 after last year’s declines. The Global X Uranium ETF (URA), which has about $1.69 billion in assets, jumped more than 12% in 2023. Last year, the URA fell about 12%, a decline which again outperformed the S&P 500 returns. These funds invest in a variety of nuclear-related stocks across the value chain. These include companies involved in mining uranium to refine it to those that manufacture equipment for nuclear power plants. Examples include Denison Mines, Cameco and Centrus Energy, among others. Other global nuclear energy ETFs such as Sprott Uranium Miners (URNM) and VanEck Uranium+Nuclear Energy (NLR) gained more than 13% and 4% respectively in 2023. their nuclear capabilities considerably, particularly in Asia. For example, China, which has more than 50 reactors, plans to roughly double its fleet by 2030, according to Citi. In October, Citi viewed Shenzhen-based CGN Power as a buying opportunity, citing its “rising market-based pricing, decent capacity expansion, positive free cash flow.” Meanwhile, India plans to increase the number of reactors by 22, according to Citi, and political support for nuclear power is also growing in South Korea, which manufactures its own nuclear capabilities. Conversely, Western Europe is expected to reduce its global nuclear capacity to around 20% from 25%, the note reads.
Oliver Stone’s new film puts nuclear energy in the spotlight. These stocks are ready to jump on the trend
