Citi upgrades Net Power to Buy, sees opportunity after selloff

Citi upgraded Net Power (NPWR) to Buy from Neutral with a price target of $6, down from $14. The stock fell 60% yesterday, likely on cost inflation and new liquidity concerns, the analyst tells investors in a research note. The firm sees an attractive entry point, saying Net Power has $533M of liquidity, or three years of runway, and “well-resourced partners” that can step in to position the company to pursue the “large” power generation opportunity. Citi points out that due to an increase in indicative capex, Net Power estimates a $600M-$900M funding shortfall for Project Permian, and a final investment decision is contingent on whether the company could secure this financing. The firm sees “downside protection” at $2.45 per share, the company’s cash trading value before considering any enterprise to business opportunities.