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• Keppel REIT recently issued S$100 million in subordinated perpetual securities under its multicurrency debt programme, having received approval-in-principle for listing on the Singapore Exchange.

• This move is set to provide Keppel REIT with greater financial flexibility and supports its plans for future portfolio growth.

• We will assess how the increased capital flexibility from this perpetual securities issuance could shift Keppel REIT’s investment narrative.

Uncover the next big thing with financially sound penny stocks that balance risk and reward.

To be a shareholder in Keppel REIT, you need confidence in the continued strong demand for premium Grade A office space in Singapore and regional gateway cities, as well as the trust’s ability to manage sector and geographic concentration risks. The recent S$100 million perpetual securities issuance boosts Keppel REIT’s capital flexibility, but does not materially change the main short-term catalyst of rental growth in key markets or the cyclical risks tied to office occupancy and portfolio concentration.

Among recent developments, the acquisition of a 75% interest in Top Ryde City Shopping Centre in Sydney stands out. This move is relevant as it increases portfolio diversification beyond the office sector and into retail, potentially balancing the risks posed by Keppel REIT’s office-heavy exposure while positioning the trust to benefit from stable, non-discretionary retail income streams.

Yet, while recent expansion points to greater diversification, investors should still keep an eye on the persistent risks from concentrated exposure to Singapore’s office market if…

Read the full narrative on Keppel REIT (it’s free!)

Keppel REIT’s narrative projects SGD319.1 million in revenue and SGD188.0 million in earnings by 2028. This requires a 6.4% annual revenue decline and an earnings increase of about 19% from today’s earnings of SGD157.8 million.

Uncover how Keppel REIT’s forecasts yield a SGD1.06 fair value, in line with its current price.

Simply Wall St Community members provided 2 fair value estimates for Keppel REIT, ranging from S$1.06 to S$1.72 per unit. Ongoing concerns about sector-specific downturns and portfolio concentration continue to shape differing outlooks on future performance, explore these varied perspectives to better understand your options.

Explore 2 other fair value estimates on Keppel REIT – why the stock might be worth just SGD1.06!

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

Early movers are already taking notice. See the stocks they’re targeting before they’ve flown the coop:

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include K71U.SI.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

• Thinking about investing in NuScale Power? You might be wondering whether the recent ups and downs in the share price have created a new value opportunity, or if the risk profile has just shifted.

• NuScale’s stock has moved a lot lately, climbing 7.5% over the past week, but still down 52.7% across the last month and 32.5% over the last year. This reflects a volatile period, despite a notable 12.9% gain year to date.

• News of new project partnerships, as well as ongoing discussions about U.S. energy policy and small modular reactor adoption, have been fueling trading sentiment recently. Investors are weighing both the growth potential of NuScale’s nuclear technology and the challenges facing the broader clean energy sector.

• With a valuation score of 1 out of 6, there is a lot to uncover about how NuScale Power stacks up on different valuation metrics. Stay tuned as we break those down and reveal a smarter way to interpret valuation at the end.

NuScale Power scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by forecasting its future cash flows and discounting them back to today. This approach attempts to answer what NuScale Power is fundamentally worth based on current and expected financial performance.

Currently, NuScale Power’s latest twelve-month Free Cash Flow (FCF) sits at a negative $284.0 million, and analysts expect the company to remain cash flow negative for the next several years. According to projections, NuScale’s FCF is only expected to turn positive by 2029, reaching $27.4 million, with continued growth beyond that point driven by anticipated deployment of its modular nuclear technology. Notably, the longer-term FCF forecasts, extending out to 2035, are largely extrapolated from analyst consensus.

Plugging these estimates into the DCF model yields a “fair value” of $3.20 per share. Compared to the current market price, this implies the stock is 525% above its calculated intrinsic value, suggesting significant overvaluation at present.

The DCF model, therefore, paints a challenging picture for value seekers. NuScale’s growth narrative is not yet reflected in its cash flows, and the stock trades with a large premium to its estimated worth.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests NuScale Power may be overvalued by 525.0%. Discover 917 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for NuScale Power.

The Price-to-Book (P/B) ratio is a widely used valuation metric, especially for companies where traditional earnings or cash flow metrics may not yet reflect future potential. This often includes innovative but unprofitable businesses like NuScale Power. The P/B ratio captures the relationship between a company’s market value and its net assets, making it relevant when investor focus is on the value of assets and future growth prospects rather than current profits.

Growth expectations and risks both play a crucial role in determining what an appropriate or “fair” P/B ratio should be. High growth prospects can justify a premium, while greater risk or asset uncertainty typically means a lower fair multiple. For NuScale Power, the current P/B sits at 6.72x, which is significantly above the electrical industry average of 2.38x and the peer group average of 18.32x. This signals that the market expects substantial future value creation from NuScale’s assets compared to most competitors.

Simply Wall St’s proprietary “Fair Ratio” is designed to refine this comparison. Unlike raw peer or industry averages, the Fair Ratio blends factors like NuScale’s earnings growth outlook, profit margins, market cap, sector trends, and risk profile. This offers a more tailored assessment of what multiple is justifiable for the company now, factoring in its distinct position and prospects in the market.

Comparing NuScale Power’s current P/B of 6.72x to its Fair Ratio, the difference is meaningful. This suggests the stock is OVERVALUED on a price-to-book basis at the moment and may not yet offer an attractive entry point for value-seeking investors.

Result: OVERVALUED

PB ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1439 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives, a dynamic, story-driven approach to investing used by millions of investors on Simply Wall St’s Community page.

A Narrative is your personal way of connecting the company’s story and your perspective to informed numbers. You explain what you believe will drive NuScale Power’s future, estimate upcoming revenues, earnings, and margins, and see how that translates to a fair value for the stock.

With Narratives, you can easily compare your fair value estimate to NuScale’s current price, helping decide if now is the right time to buy or sell based on your outlook rather than just traditional metrics.

What makes Narratives especially powerful is that they update automatically when new information comes in, such as earnings results or major news, so your view stays current without extra work on your part.

For example, some NuScale Power Narratives are much more bullish, forecasting a fair value as high as $40.50 per share based on rapid deployment and major utility deals, while others are more cautious, seeing risks and setting fair values as low as $17.00 per share. This shows how quickly perspectives and valuations can change as the story unfolds.

Do you think there’s more to the story for NuScale Power? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include SMR.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com