Key Points
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Centrus announced the $116 million acquisition of Westerman, one of its largest suppliers.
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Several firms revised their price targets downward after learning of the Westerman acquisition.
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Centrus ended September 2026 with a backlog of $5.4 billion for its LEU and HALEU businesses.
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Limping toward the end of 2026, Centrus Energy (NYSE:LEU) stock fell 18.6% in September and continued to decline last month. Analysts took a more bearish stance on the nuclear stock, and investors were clearly paying attention.
According to data provided by S&P Global Market Intelligence, Centrus Energy stock fell 26% in October, while the S&P 500 dipped 0.5%.
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Firms are skeptical of the company’s acquisition of a key supplier
On Oct. 19, Centrus announced its acquisition of Westerman Holdings, which the company characterizes as one of its largest and most diversified suppliers. Centrus believes that the transaction, funded with about $95 million in cash and $21 million in equity, will contribute to its adjusted earnings per share in the first year following its closing.
Centrus lauded the acquisition as “a significant milestone … as it builds supply chain resilience while diversifying its revenue base.” Westerman provides Centrus to a variety of industries beyond nuclear, including oil and gas and other industrial sectors.
Investors immediately expressed their disapproval of the acquisition. Centrus shares dropped more than 4% on Oct. 19 from the stock’s previous close.
On Oct. 20, analysts began to weigh in on the acquisition — and the opinions were hardly encouraging. Roth Capital slashed its price target on Centrus to $115 from $188, maintaining a neutral rating. According to Thefly.com, the firm updated its model after Centrus acquired Westerman Holdings and believes that the company’s third-quarter financial results could disappoint investors.
In the ensuing days, firms shared a variety of other downwardly revised price targets.
- On Oct. 20, Barclays lowered its price target to $150 from $207.
- On Oct. 23, UBS dropped its price target to $120 from $185.
- On Oct. 26, JPMorgan reduced its price target to $120 from $180.
Centrus is a leading provider of nuclear fuel and services for the nuclear power industry. One area in which the company distinguishes itself is the production of high-assay low-enriched uranium (HALEU), a specialized form of nuclear fuel required by small modular reactors (SMRs), the next generation of nuclear reactors. At the end of September 2026, Centrus reported a backlog of $5.4 billion for both low-enriched uranium (LEU) and HALEU businesses.
Is Centrus stock a buy on the recent dip?
While firms may have soured on Centrus stock due to its acquisition of Westerman, long-term investors should hardly follow their lead. The company has a robust competitive advantage in its nuclear fuel production capabilities, which should serve it well as the nuclear energy renaissance continues to take shape. For those seeking a leading nuclear energy stock, Centrus remains a worthwhile consideration.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
