UBS raised Cameco to Buy from Neutral with a price target of C$166.00, treating the miner’s recent slide as sentiment rather than a change in fundamentals. The bank points to long-term uranium contract prices at record highs, accelerating utility contracting and continued government support for nuclear energy.
UBS upgraded Cameco Corp. to Buy from Neutral, setting its price target at C$166.00. The call follows an 18% decline over one month and a 27% drop over six months, which UBS attributes to broader market and AI-related sentiment rather than changes in fundamentals.
The shares trade at $87.86. That gives Cameco a market capitalization of $38.3 billion.
UBS puts the nuclear cycle in its early stages
Beyond the contract-price record, UBS notes that utility contracting and requests for proposals are accelerating and that government support for nuclear energy continues. Recent momentum behind AP1000 reactor deployment and the prospect of further reactor announcements support the bank’s view that the nuclear cycle is in its early stages, with demand growth exceeding a 3.5% compound annual growth rate.
Heightened geopolitical risks underscore strategic value, the firm says, and Cameco remains what it calls the clearest and most liquid global exposure to the nuclear theme. UBS expects the stock to stay structurally crowded given scarcity value, industry leadership and unique leverage to a multi-decade growth story.
Positive catalysts this year include contract price upside, meaningful AP1000 announcements and government support, plans for physical uranium futures and continued supply challenges of incumbents, according to UBS.
Cigar Lake halted while brokers move their targets
Cameco completed the acquisition of a 2.871% stake in the Cigar Lake uranium mine from TEPCO Resources Inc., increasing its ownership to 57.418%. However, the company also announced a temporary suspension of operations at Cigar Lake because of issues at Orano’s McClean Lake mill, which processes the mine’s ore. The mill faced operational challenges with its sulfuric acid plant, halting production until repairs are completed and alternative acid supplies are secured.
Other brokers moved in both directions. RBC Capital raised its price target to Cdn$175.00, citing stronger uranium prices and increased interest from sovereign buyers and larger utilities. BofA Securities lowered its price target to $140 while maintaining a Buy rating, noting that current spot prices are below future forecasts.
The U.S. Department of Energy committed to a loan package of up to $17.5 billion to support the supply chain for AP1000 nuclear reactors, a package expected to primarily finance Westinghouse Electric Company, which Cameco co-owns with Brookfield Renewable Partners.
Source: Investing.com
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