Fervo Energy rallies as Jefferies turns bullish following stock's drop since May IPO

X-Energy

20/07/2026 13:42

** Fervo Energy's FRVO.O shares up 5.4% premarket on Mon to $25.97 after Jefferies upgrades geothermal energy developer to 'buy' from 'hold', citing stock's approx 40% drop from May IPO highs
** Despite no disruption to FRVO's timeline or material updates from management, investors seemingly grouping FRVO with high-beta nuclear peers such as X-Energy XE.O, Oklo OKLO.N and Nuscale Power SMR.N, Jefferies writes in note
** While long duration stories with commercialization timelines 5-plus years away have fallen out of favor amid AI-bubble concerns and geopolitical uncertainty, Jefferies argues the high-risk/long-term reward comparison is unfair
** Jefferies remains constructive on FRVO's Phase 1 commercial operation date timing, expected later this year, adding that stock's valuation does not capture near-term catalysts or the potential for co to more than double U.S. geothermal capacity within 5-10 years
** Brokerage cuts PT to $34 from $41, pointing to raised discount rate on cash flows
** FRVO shares debuted at $36 on May 13 after $1.9 bln IPO priced at $27. Stock, which traded as high as $42.65 (May 15), hit intraday low of $22.50 on Fri
** Houston, Texas-based co backed by Bill Gates' investment firm Breakthrough Energy Ventures and shale producer Devon Energy DVN.N
** 11 of 12 analysts rate the stock "strong buy" or "buy", 1 "hold"; median PT $47, per LSEG data

(Lance Tupper is a Reuters market analyst. The views expressed are his own)
((lance.tupper@tr.com 1-646-279-6380))