Today’s episode of Full Court Finance at Zacks explores why nuclear energy stocks such as Vistra and Cameco have soared since Constellation Energy’s massive Microsoft deal. The episode also digs into the long-term bull case for nuclear energy as it becomes the star of the energy transition and the power behind the artificial intelligence age.
The episode then breaks down three more under-the-radar nuclear energy stocks—FLR, BWXT, and GEV—to buy now for long-term upside.
The Nuclear Energy Bull Case
Nuclear energy and uranium stocks have soared since Constellation Energy CEG signed a 20-year power purchase agreement with Microsoft.
Microsoft and many other tech giants are racing to secure power agreements from nuclear energy and non-fossil fuel firms. Constellation’s Microsoft deal cements part of the nuclear bull case: nuclear energy will fuel the AI boom.
The U.S. and many other nations have done a 180-degree turn on nuclear energy over the last few years. Titans of technology, finance, the government, and beyond realized nuclear energy capacity needed to expand rapidly to meet their energy transitions goals in a thriving economy.
Constellation and Vistra VST are two of the three top-performing S&P 500 stocks in 2024 alongside Nvidia. Both are strong long-term investments.
Today we dive into three nuclear energy stocks outside of these Wall Street stars to consider buying.
Buy Fluor as a Nuclear Energy Stock with 50% Upside?
Fluor Corporation FLR is a broad-based investment into the entire energy transition, from nuclear energy and small modular reactors to energy and battery storage, carbon capture, and beyond. Fluor provides engineering, procurement, construction, and maintenance services via subsidiaries across Energy Solutions, Urban Solutions, and Mission Solutions.
Fluor provides solutions to the energy transition markets, including asset decarbonization, carbon capture, renewable fuels, waste-to-energy, green chemicals, hydrogen, nuclear power, and other low-carbon energy sources.
Fluor’s nuclear segment includes new build, nuclear operations & management, and nuclear power plant support services. On top of that, Fluor has a 51% ownership stake in small modular nuclear reactor company NuScale Power SMR.
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Fluor posted blowout growth in 2023 and is expected to expand its revenue by 14% in 2024 and 11% next year to help boost its adjusted EPS by 6% and 12%, respectively. Flour’s FY25 consensus EPS estimate has jumped 22% over the last year.
Fluor stock has climbed 150% in the last five years to outpace the Zacks Construction sector and blow away the S&P 500’s 97%. FLR is up 25% during the past year. Despite the run, FLR trades almost 50% below its 2008 peaks and 10% under its 52-week highs from July.
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Fluor found support at its 21-week moving average and it is ready to retake its 50-day even as it trades at neutral RSI levels.
Valuation-wise, FLR trades at a 21% discount to the Zacks Construction sector at 14.7X forward 12-month earnings.
Why BWX Technologies is a Buy and Hold Nuclear Energy Stock
BWX Technologies, Inc. BWXTis a top supplier of nuclear technologies, components, and fuel to the U.S. government. BWX Technologies is actively growing its commercial nuclear power segment and non-defense units.
BWXT is expanding its Ontario production facility, which is already one of the largest commercial nuclear equipment manufacturing facilities on the planet. The build-out will help BWXT “support ongoing and anticipated customers’ investments in Small Modular Reactors, traditional large-scale nuclear and advanced reactors, in Canada and around the world.”
BWXT has landed various key commercial and government nuclear contracts. The U.S. Office of Nuclear Energy announced earlier this week that BWX Technologies is helping manufacture a cutting-edge micro-nuclear reactor in partnership with the U.S. Department of Defense.
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BWXT is projected to grow its revenue by 6% in 2024 and 5% next year to pull in $2.8 billion to help boost its adjusted EPS by 6% and 5%, respectively. BWXT has topped our EPS estimates for six quarters running.
BWXT shares have climbed 260% in the last 10 years to outpace the S&P 500’s 200% and its industry’s 130%. BWXT broke out to new highs last summer.
BWXT stock has surged 40% YTD and it hit fresh 52-week on Thursday. Despite trading at its all-time highs, BWXT trades at a 50% discount to its highs, with a PEG ratio of 3.5.
Buy Soaring GE Vernova Stock Now?
GE Vernova Inc. GEVwent public in April after General Electric completed its separation. GEV is “singularly focused on accelerating the energy transition,” according to CEO Scott Strazik with offerings that span electrification, nuclear energy, and beyond.
GE Vernova reports via three business segments: Power, Wind, and Electrification. GEV’s steam power unit provides nuclear turbine island technologies and services for all nuclear reactor types, supporting more than 80 units in the Americas region.
Meanwhile, GEV’s GE Hitachi Nuclear Energy division is a leading provider of advanced nuclear reactors, fuel, and nuclear services. GEV’s chief executive recently told the Wall Street Journal that “gigawatts upon gigawatts of nuclear capacity” are going to start being added every year.
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GE Vernova provided upbeat guidance when it reported its Q2 results. Wall Street also recently cheered reports that GEV plans to slash the size of its struggling offshore wind business as inflation and supply chain challenges plague the industry.
GEV is projected to grow sales by 5% in 2024 and 7% next year. GE Vernova is projected to more than double its adjusted earnings in 2025—from $2.83 to $6.49 a share. And GE Vernova’s 2025 earnings outlook keeps improving.
GEV stock has climbed over 80% since its stock market debut, including a 35% surge in the past month. The stock might be overheated at the moment. But a pullback to GE Vernova’s 21-day moving average would mark a screaming buy opportunity.
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