A Stark Shift for NET Power: Barclays Issues Downgrade Amid Mounting Legal Woes and Market Weakness

NET Power Inc. (NPWR), a developer of breakthrough natural gas power generation technology, has found itself at a crossroads. Barclays, a global investment bank known for its rigorous equity research, has shifted its outlook on the company, downgrading NPWR from "Equal Weight" to "Underweight" and slashing its price target from $3 to $2. This downgrade arrives at a critical moment—amid a year-long decline in share price, mounting legal action, and eroding investor confidence. For investors seeking clarity in an increasingly volatile small-cap energy landscape, this move warrants close analysis.

Analyst upgrades and downgrades carry amplified significance for under-the-radar innovators like NET Power, especially when driven by powerhouse firms such as Barclays. Today’s downgrade is more than a rating change—it’s a signal that the risks facing NPWR may now outweigh the rewards in the eyes of institutional finance.

Key Takeaways:

  • Potential Downside: Barclays’ new $2 price target suggests a further drop of 2.2% from the current price of $2.045, underscoring a lack of near-term bullish conviction.

  • Stock Performance: NPWR shares have fallen from a 52-week high of $14.28 to a cycle low of $1.84, reflecting sustained negative sentiment (down days outnumber up days 142 to 105).

  • Legal Headwinds: Three different class action lawsuits have been filed against NPWR in the past 30 days, raising questions about financial disclosure and governance.

  • Volume Collapse: Daily trading activity has plummeted to its lowest point this year, with just 1,703 shares changing hands in the most recent session—well below the average daily volume of 63,900.

  • Technical Weakness: Technical indicators show the stock is oversold (RSI of 37), and trading below both its 20-day EMA and SMA, with price hugging the lower Bollinger Band.

Barclays’ Downgrade in Context: Understanding the Analyst’s Perspective

Barclays: Authority and Rationale

Barclays is one of the world’s largest and most influential banks, with a deep bench of sector-specialized analysts. Their coverage is closely followed by institutional investors and portfolio managers, particularly in emerging technology and energy. The downgrade from "Equal Weight" to "Underweight," coupled with a reduced target, signals significant skepticism about NPWR’s ability to recover in the near term. Barclays is known for its conservative calls in the face of deteriorating fundamentals or heightened risk, and today’s action aligns with that reputation—especially as legal risks pile up and momentum falters.

A Closer Look at the Rating Change

  • Previous Rating: Equal Weight (suggesting a neutral market stance)

  • New Rating: Underweight (signaling NPWR is expected to underperform sector peers)

  • Previous Target: $3

  • New Target: $2

  • Current Price: $2.045 (in early trading on April 23, 2025)

The downgrade is both a reaction to and a reinforcement of prevailing market pessimism. Barclays’ move adds institutional weight to the bearish narrative and may further pressure shares as risk-averse investors recalibrate exposure.

Anatomy of a Collapse: NET Power’s Financial and Stock Performance

One Year in Review: From Hype to Hesitation

NPWR captured market attention with its promise of low-emission, natural gas power plants that recycle carbon dioxide—a potentially game-changing solution in the energy transition. However, over the past year, the company’s stock has endured a relentless decline:

  • 52-week high: $14.28 (November 2024)

  • 52-week low: $1.84 (April 21, 2025)

  • Current price: $2.045

  • Average daily volatility: 0.5% (reflecting persistent uncertainty)

  • Average daily volume: 63,900 (recently collapsed to 1,703)

  • Down days: 142 (vs. 105 up days)

Technical analysis paints a bearish picture. The price is trading well below the 20-day exponential and simple moving averages, and the recent Relative Strength Index (RSI) of 37 points to oversold conditions. The stock is hugging the lower Bollinger Band, a classic sign of sustained downward momentum with little evidence of reversal.

Financials: Data Scarcity and Investor Anxiety

Unlike established energy peers, NET Power’s financial disclosures are limited, a byproduct of its pre-revenue, project-development stage. This opacity is precisely what has drawn legal scrutiny and compounded investor anxiety. With multiple class action suits underway and the stock’s volume drying up, the market is expressing clear doubts about the company’s ability to deliver on its promise—at least in the medium term.

Legal Storm Clouds: Class Action Lawsuits Take Center Stage

The past month has seen a barrage of legal headlines, with at least three major law firms announcing class action lawsuits against NET Power:

“This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired NET Power securities between June 9, 2023 and March 7, 2025.”
— Bronstein, Gewirtz & Grossman LLC

The legal uncertainty is likely a central factor in Barclays’ downgrade. For small-cap innovators, litigation risk can quickly overwhelm even the most compelling technology narrative.

Potential Downside: What the $2 Target Implies

With shares at $2.045 and Barclays’ new target set at $2, the implied potential downside is approximately 2.2%. While this may seem modest after such a steep decline, it’s the symbolism—the analyst’s admission that the stock could drift lower still—that matters most for institutional holders. It’s an explicit warning that there may not yet be a floor.

For self-directed investors, this is an opportunity to reassess risk appetite and consider whether the long-term potential of NPWR’s technology is enough to warrant enduring further near-term pain.

Technicals, Sentiment, and Liquidity: A Trifecta of Weakness

  • Liquidity Drought: With volume at yearly lows, price discovery is hampered, and even modest selling can drive sharp declines.

  • Momentum Gauges: RSI remains in oversold territory, and all major moving averages point down.

  • Sentiment Ratio: Only 42% of trading days were positive over the last year, underscoring persistent bearishness.

Conclusion: Is There a Contrarian Opportunity or is Caution Paramount?

Barclays’ downgrade is a wake-up call for investors hoping for a quick turnaround in NET Power’s fortunes. The convergence of legal action, technical breakdown, and evaporating liquidity have created a near-term minefield. For sophisticated investors, the critical questions now are:

  • Is the technology pipeline robust enough to outlast current legal and financial headwinds?

  • Are institutional outflows complete, or could further downgrades push NPWR below $2?

  • Does the risk/reward profile justify a contrarian bet at these levels, or is patience the better part of valor?

In sum, while NET Power’s story remains compelling in the context of energy innovation, the data-driven evidence from Barclays and the market at large suggest caution is warranted. Investors should closely monitor legal developments and wait for clear signs of stabilization before considering new exposure.

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