Amentum’s new European nuclear contract: what it could mean for the stock

Amentum Holdings (AMTM) has been selected to lead a joint venture delivering decommissioning and waste management services at nuclear research facilities in Italy, Germany, Belgium, and the Netherlands under a $112 million framework contract.

The European Commission Joint Research Centre award covers reactors, hot cells, accelerators, and laboratories, with an initial two year term and three possible two year extensions. This creates a fresh multi year revenue opportunity for Amentum’s nuclear services business.

Amentum’s new European nuclear contract arrives after a mixed run for the shares, with a 1 day share price return of 0.97% and a 30 day share price return decline of 19.26%, set against a 1 year total shareholder return of 63.25% that points to momentum built over a longer horizon.

If this nuclear win has you thinking about the wider theme, it could be a good moment to look at 86 nuclear energy infrastructure stocks as another way to spot potential opportunities in the sector.

With the shares down 19.26% over 30 days but still up 63.25% over 1 year, and trading about 21% below the average analyst target, is Amentum now mispriced, or is the market already baking in future growth?

Most Popular Narrative: 9.4% Undervalued

The most followed narrative puts Amentum’s fair value at $33.45, a touch above the last close of $30.30, and frames today’s price as a discount based on long term contracts and earnings potential rather than recent share price swings.

Ramp up of large, long duration awards such as the U.S. Space Force Range contract, Sellafield remediation and NASA Cosmos is set to convert the current $47 billion backlog and $20 billion of pending bids into higher run rate revenues and improved operating leverage, supporting sustained earnings growth.

Curious what kind of revenue pace and margin profile are being baked into that fair value, and how they link to that backlog and earnings ramp story? The narrative leans on a specific glide path for sales, profitability and the future earnings multiple to justify its view, but the crucial details sit beneath the headline numbers.

Result: Fair Value of $33.45 (UNDERVALUED)

However, this view could easily be challenged if U.S. government funding disruptions delay contract awards or if large programs run into cost overruns and margin pressure.

Another angle on valuation: earnings multiples look stretched

While one model points to Amentum trading below fair value, the current P/E of 75.4x is far higher than both the peer average of 17.3x, the US Professional Services industry at 21.3x, and even the fair ratio of 36.3x. That gap can signal valuation risk if earnings progress stalls, so which signal do you trust more?

Next Steps

If this combination of contract wins, valuation gaps and backlog stories leaves you unsure, it is worth reviewing the numbers yourself, forming a clear view and then weighing up 4 key rewards and 2 important warning signs to see how that balance of concerns and potential upside looks to you.

Looking for more investment ideas?

If Amentum has sharpened your focus, do not stop here. These tools can help you turn curiosity into a broader, more informed investing watchlist.

• Target potential bargains by scanning our 46 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect their strengths.
• Build a steadier income stream by reviewing 14 dividend fortresses that combine higher yields with an emphasis on durability.
• Prioritise resilience by checking 63 resilient stocks with low risk scores designed to highlight companies with lower overall risk profiles.

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.