Centrus Energy Stock Surges on Major Government Fuel Contract

Shares of Centrus Energy are holding onto substantial recent gains following a pivotal government award. The catalyst is a $900 million contract from the U.S. Department of Energy (DOE) for domestic production of high-assay low-enriched uranium (HALEU), positioning the company for a new industrial growth phase.

The market's reaction to the DOE contract has been pronounced, with shares climbing over 17% in the past fortnight. However, analyst assessments reveal significant divergence, highlighting varying views on the long-term profitability of the HALEU sector.

Recent analyst actions include:
* Needham maintains a "Buy" rating with a $357 price target.
* B. Riley raised its target to $315, citing reduced risk in centrifuge manufacturing.
* Roth Capital increased its target from $117 to $125 but kept a "Neutral" stance, noting significant potential downside from current levels.
* William Blair and Evercore ISI continue to recommend "Outperform," supported by the company's $2.3 billion order backlog.

Market attention is now focused on the finalization of contract details with the DOE, which will govern the disbursement of the $900 million in federal funds.

A $900 Million Catalyst for Domestic Supply

The company's current valuation is heavily influenced by this finalized award for its Piketon, Ohio enrichment facility. This funding is part of a broader $2.7 billion U.S. government initiative to rebuild the domestic nuclear fuel supply chain, establishing Centrus as a primary contractor for next-generation reactor fuel needs.

Should investors sell immediately? Or is it worth buying Centrus Energy?

The total financial scope of the undertaking is multifaceted:
* $900 million in direct federal funding for HALEU production expansion.
* $2.3 billion in existing purchase commitments for low-enriched uranium (LEU) from commercial utilities.
* $1.2 billion in private capital previously raised via convertible notes for infrastructure development.

Scaling Up Production and Operations

To meet DOE production milestones, Centrus has already initiated domestic centrifuge manufacturing in Oak Ridge. This step is critical for deploying additional AC-100M cascades, with the first new capacity scheduled to come online in 2029.

Concurrently, plans are advancing for a 1.6 million-square-foot training, operations, and maintenance facility in Ohio. This expansion is designed to manage the increased operational complexity of commercial-scale HALEU production.

The company's unique position within the domestic nuclear fuel sector continues to underpin its market performance.