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Morgan Stanley’s Strategy for Participating in the Worldwide Nuclear Power Resurgence



The nuclear industry has seen a resurgence in recent years, with promises of a nuclear renaissance gaining momentum. According to Morgan Stanley analysts, there are signs that this time around, the hype may actually be real. The firm sees Curtiss-Wright, a company that supplies nuclear plants with crucial parts, as a potential winner in this space. They have raised Curtiss-Wright’s price target by $46 to $330, implying more than 17% upside from the current price. The company’s growth story as an attractive “pick-and-shovels” way to play the nuclear renaissance theme is underappreciated, according to the analysts.

Curtiss-Wright is a key player in the nuclear industry, building crucial reactor coolant pumps for Westinghouse’s third-generation AP1000 nuclear plants. With growing interest in these builds in Europe, especially in the wake of energy independence concerns following Russia’s invasion of Ukraine, future AP1000 sales are seen as a potential source of upside for Curtiss-Wright. Despite the fizzling out of talk about a nuclear renaissance 15 years ago, the current scenario is different. The increased electricity demand, growth of data centers, and interest in reliable carbon-free energy to address climate change are driving factors behind the resurgence of the nuclear industry.

After a decade of nuclear plant closures, reactors are now being modernized to extend their service life. Additionally, communities are showing interest in new plants as they phase out coal. In the more immediate future, Curtiss-Wright is set to benefit from the modernization of current nuclear plants in the U.S., Canada, South Korea, and potential builds in Europe. The company sees a significant revenue opportunity through 2050, with a potential valuation of $488 per share in a bull case scenario, implying nearly 74% upside from the current price.

Morgan Stanley’s analysts are optimistic about Curtiss-Wright’s prospects, noting the shift towards nuclear energy as a reliable and carbon-free source of power. With potential new builds in Europe and the modernization of existing plants in the U.S. and Canada, the company is well-positioned to capitalize on the growing demand for nuclear energy. The analysts highlight Curtiss-Wright’s role as a key supplier in the nuclear industry, particularly in providing crucial parts for third-generation nuclear plants.

The company’s reactor coolant pumps are essential components for nuclear plants, and their importance is expected to increase as more plants are built or modernized. With a strong track record of supplying all 94 reactors in the U.S., all 19 in Canada, and plants in South Korea, Curtiss-Wright is a trusted partner in the nuclear industry. The potential for new builds and modernization projects presents a significant revenue opportunity for the company, with estimates pointing towards substantial growth in the coming years.

In conclusion, Curtiss-Wright is well-positioned to benefit from the resurgence of the nuclear industry, driven by increasing demand for reliable carbon-free energy. With a strong outlook for new builds and modernization projects, the company is poised for significant growth in the coming years. Investors looking to capitalize on the nuclear renaissance theme may find Curtiss-Wright to be a promising investment opportunity, with potential upside in its stock price on the horizon.

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