Citi Raises NET Power Price Target to $11 from $9, Maintains Neutral Bias According to Investing.com

On Wednesday, Citi showed confidence in NET Power Inc. (NYSE: NPWR), raising the price target for the company’s shares to $11.00 from the previous $9.00, while maintaining a neutral rating. The adjustment reflects the company’s view on the energy company’s potential development prospects.

NET Power, specializing in the operation of gas power plants, was indicated as a company that could significantly benefit from the growing demand for data center power. The company’s success depends on its ability to minimize the risks associated with the construction and operation of facilities.

The revised price target comes amid expectations that NET Power technology could play a key role in meeting the growing energy needs of data centers. Since these facilities require stable and reliable power, NET Power’s ability to deliver could position it well in the industry.

Citi’s commentary highlighted the long-term prospects for NET Power, suggesting that if the company manages to overcome the challenges posed by its business model, it will benefit from an expected acceleration in data center workload growth that will last into the 2030s.

In other recent news, NET Power Inc. reported solid financial position during its first quarter 2024 earnings call, ending the quarter with approximately $625 million in cash and investments. The company has key projects underway, including a utility-scale product and first design, and is preparing to significantly scale up production by the early 2030s. The NET Power market is growing faster than expected thanks to favorable government policies and the company’s technology is compliant with EPA Section 111 B&D emissions regulations.

In addition, NET Power has filed a MISO interconnection application for its first project, OP1, and discussions are underway to fund regional origin programs. The company is also upgrading its La Porte demonstration facility with Baker Hughes, and the Permian project is expected to begin generating power in the second half of 2027 to the first half of 2028. These are among the latest developments that underscore NET Power’s commitment to advancing its clean energy projects.

InvestingPro Insights

As NET Power Inc. (NYSE: NPWR) attracts investor attention for its potential in the data center power industry, a deeper dive into its financial health and market performance paints a clearer picture. With a market capitalization of $2.14 billion, NPWR’s financial position is notable as it has more cash than debt, providing a cushion for operational needs and growth initiatives. However, its gross profit margins are under pressure, with recent data indicating a gross profit margin of -902.4% for the trailing twelve months to Q1 2024. This suggests that while the company may have a strong balance sheet, profitability remains a challenge.

Stock price movement also presents interesting dynamics, often moving against market trends. This could indicate unique investor sentiment or market factors at play specific to NPWR. Moreover, analysts do not expect the company to turn a profit this year, which is in line with the negative earnings per share (EPS) reported at -$1.23. This is critical for investors, especially considering the company’s high revenue valuation multiple.

For those considering investing in NPWR, there are some additional InvestingPro tips available that may help you make a more informed decision. For example, although NPWR does not currently pay a dividend, its liquid assets exceed its short-term liabilities, which may indicate financial resilience. Potential investors can explore these nuances further by accessing InvestingPro for comprehensive analysis. There are 8 additional tips available that can be unlocked with a coupon code PRONEWS24 and receive an additional 10% discount when you purchase a one- or two-year Pro and Pro+ subscription.

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