JOLTS Job Openings (Jun) 7.44M vs 7.5M Expected
On Monday, RBC Capital Markets reaffirmed their positive stance on Cameco Corp (TSX:CCO) . (NYSE:CCJ), maintaining an Outperform rating and a price target of Cdn$90.00. With a market capitalization of $20.4 billion and a "GOOD" financial health score according to InvestingPro, Cameco has shown strong momentum with a 29.9% revenue growth over the last twelve months. RBC Capital’s analysis indicates that despite a currently tight uranium market with limited activity so far in 2025, there is an expectation for increased contract activity in the second half of the year. The market may approach replacement rate levels by 2026 as utility contract coverage is projected to decline by 2028 and 2029. RBC Capital suggests that the long-term outlook for uranium could be a market deficit if new supply is delayed, highlighting potential issues such as Kazakhstan’s pending sulphuric acid plant, delays in restarts of production facilities, and permitting setbacks for Canadian projects. InvestingPro analysis shows Cameco trading at elevated multiples, with a P/E ratio of 114x, suggesting investors are pricing in significant growth expectations. Get access to 13 more exclusive InvestingPro Tips and comprehensive valuation metrics to make better-informed investment decisions.
Cameco’s management has emphasized a disciplined approach to capital allocation, with the company continuing in supply discipline mode. However, growth investment opportunities are on the horizon, including the expansion of uranium production at McArthur River, potential increased ownership in Global Laser Enrichment, and the possibility of restarting Springfields to boost conversion capacity.
Operationally, Cameco’s uranium and fuel services are performing well. With a healthy current ratio of 2.7x and moderate debt levels, the company maintains strong operational flexibility. McArthur River and Cigar Lake are operating at full capacity with low production costs, and JV Inkai in Kazakhstan has resolved earlier regulatory issues and is targeting an increase in production for 2025. Fuel Services anticipates higher sales and realized prices in 2025, reflecting recent market strength.
Additionally, Cameco’s 2025 outlook for its Westinghouse segment is projected to align with the company’s five-year growth forecast, expecting an 8% growth year-over-year, with earnings anticipated to be weighted towards the latter half of the year, particularly in Q4.
RBC Capital has adjusted its EBITDA estimates for Cameco, now forecasting $1.7 billion for 2025 and $2.0 billion for 2026, revised from the previous $1.5 billion and $2.1 billion, respectively. This outlook is based on the anticipation of a strengthening uranium market and Cameco’s strategic growth initiatives. For deeper insights into Cameco’s valuation and growth potential, access the comprehensive Pro Research Report available exclusively on InvestingPro, covering detailed analysis of 1,400+ top stocks.
In other recent news, Cameco Corp has been in the spotlight with several developments. Desjardins initiated coverage on Cameco, issuing a Buy rating and setting a price target of C$86, reflecting confidence in Cameco’s strong position in the uranium market. Similarly, Stifel Canada began coverage with a Buy rating and a price target of C$90, citing the company’s potential growth opportunities and undervalued stake in Westinghouse Electric Co. Cameco also released its 2024 Modern Slavery Report, detailing its efforts to address risks of modern slavery within its operations and supply chain, underscoring its commitment to ethical business practices. Meanwhile, the broader market context has seen Canadian investors turning to uranium, among other assets, as a hedge against potential market volatility due to U.S. tariff plans on Canadian imports. Cameco’s shares have climbed approximately 46% since early September, despite market challenges. These developments come as the company continues to navigate a dynamic market environment.
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