Shares of X-Energy Inc (NASDAQ: XE) dropped 6.8% on Wednesday after Jefferies analyst Julien Dumoulin-Smith lowered his price target to $22 from $30 while retaining a Hold rating. The downgrade follows a set of valuation adjustments and updated operating assumptions from the brokerage.
Jefferies cited mark-to-market adjustments and a reduced premium versus comparable companies as primary drivers for the new target. The firm also pointed to intensifying competition as a factor weighing on X-Energy's relative valuation. Over the past month, the stock has fallen by about 30%, a decline the brokerage links mainly to a delay in the Nuclear Regulatory Commission filing associated with the Amazon project.
Company management has characterized the NRC filing delay as effectively a non-event in terms of project execution. In a fireside chat, executives said site engineering and preparatory work continues and that NRC licensing is not on the project's critical path. The Jefferies analyst echoed confidence in the X-Energy-Amazon partnership, noting the partnership's investments and ongoing site activity as indicators of sustained demand.
On the earnings front, Jefferies trimmed its 2032-2035 EBITDA forecasts by 2% to 5%, attributing the reduction to lower fuel margins. The firm now models an initial fuel gross margin of about 30% in 2030, increasing to roughly 50% by 2040 as additional fabrication capacity comes online and scale efficiencies are realized. Jefferies' 2032 EBITDA projection stands at $1.2 billion, which the analyst notes is 24% below consensus; its 2035 EBITDA estimate is $3.5 billion, about 5% above consensus.
Looking ahead, Jefferies highlighted several mixed catalysts through the remainder of 2026. Potential positive developments include one-gigawatt project announcements and an expected NRC update for the Dow project. Offsetting these are pending updates on AP1000 work and partnerships involving enhanced geothermal systems.
The analyst also called attention to competitive threats from enhanced geothermal systems, combined cycle gas turbines paired with carbon capture, and battery energy storage systems combined with solar. These alternatives are identified as material factors influencing X-Energy's market opportunity and valuation.
Jefferies' new price target blends valuation approaches - two-thirds discounted cash flow and one-third EV/EBITDA based on 2035 estimates - and reflects a reduced reactor segment premium. That reactor premium was lowered from 56% to 24% after the median blended comparable EV/EBITDA multiple for 2032 declined by 11%.
Sector impact: The developments touch the nuclear and broader energy technology sectors, with potential implications for project finance and competitive dynamics across low-carbon generation and storage technologies.