Analyst Mike Kozak from Cantor Fitzgerald maintained a Buy rating on Cameco (CCJ – Research Report) and increased the price target to C$57.00 from C$55.00.
Mike Kozak’s Buy rating for Cameco is anchored on a number of considerations. Chief among these is the upward trend forecasted for uranium prices. Kozak projects a rise in the short-term 12-month spot uranium price to $90/lb U3O8 from its previous $75/lb U3O8, and similarly, a long-term price increase to $110/lb U3O8 from $75/lb U3O8. This revised forecast points towards a substantial upside, driving target price revisions upwards in the uranium industry by about 10%.
Additionally, there are other key factors influencing Kozak’s rating. The current scarcity of spot market volumes, which are the lowest they’ve been in about 15 years, and the unavailability of mobile inventory during the recent price surge above $60/lb, suggest a strong market. Furthermore, uranium producers are likely still short of material, and enrichment is transitioning from underfeeding to overfeeding. The active participation of end-users (utilities) in uranium purchases indicates market strength and breadth. Lastly, although Cameco’s stock has lagged in comparison to the 51% rally in spot uranium price, Kozak sees potential for a catch-up trade in the uranium equities.
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Based on the recent corporate insider activity of 50 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CCJ in relation to earlier this year.
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Cameco (CCJ) Company Description:
Cameco Corp. engages in the provision of uranium. The company operates through the following segments: Uranium and Fuel Services. The Uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The Fuel Services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion services. Cameco was founded in 1988 and is headquartered in Saskatoon, Canada.
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