Bringing the (EGS) Heat: Upgrading to BUY After the Cool-Off, $34 PT

Research evidence excerpt

Bringing the (EGS) Heat: Upgrading to BUY After the Cool-Off, $34 PT

USA | Clean Energy

Fervo Energy EquityJulyResearch20, 2026

RATING | TARGET CHANGEBringing the (EGS) Heat: Upgrading to BUY After

RATING BUY (HOLD)the Cool-Off; $34 PT

PRICE $24.65^

We upgrade FRVO to BUY after a ~40% pull-back from May IPO highs, creating

PRICE TARGET | % TO PT $34.00 ($41.00) | +38%

an improved risk-reward skew. Notably, EGS' risk profile has not changed since

52W HIGH-LOW $42.65 - $22.50

we initiated, just investors' perceptions and comfort levels on execution. We,

however, remain constructive on Phase I COD timing, expected later this year FLOAT (%) | ADV MM (USD) 56.9% | 72.08

(4Q), and take advantage of the valuation disconnect to upgrade, with our MARKET CAP $8.0B

revised PT showing +38% upside. TICKER FRVO ^Prior trading day's closing price unless otherwise

noted.

Shares Have Pulled Back — Why? Despite no disruption to FRVO's timeline or material updates

from management, shares have pulled back more than 40% from the May IPO highs, with investors

FY (Dec) CHANGE TO JEFe JEF vs CONS

seemingly grouping FRVO with high-beta nuclear peers such as XE, OKLO, and SMR. While long-

2026 2027 2026 2027

duration stories with commercialization timelines 5+ years away seem to have fallen out of favor

amid AI-bubble concerns and geopolitical uncertainty, we believe the high-risk/long-term reward REV NA NA -3% +1%

comparison is unfair. FRVO's next major catalyst is months away, not years, and the company has EPS NA NA NA NA

already demonstrated repeatable success at its pilot site, supporting a more attractive risk-reward

profile than trading implies.

Risk-Reward Compelling, Driving Our Upgrade. This valuation disconnect drives our upgrade to Better Risk-Reward Skew After the Pull-Back;

BUY.