Key Takeaways
- Cameco stock fell 11.9% in the past month (through Monday’s close), while NuScale Power and Oklo each fell more than 28%.
- Cameco’s own news was mostly good, including a US$120 billion U.S.-Korea framework for new Westinghouse reactors, so the drop came from a sell-off in nuclear stocks.
- Cameco’s forward P/E has fallen to about 52x from 111x in the spring, because the record uranium price takes time to show up in its contract earnings.
- Third-quarter results on Oct. 30 are the next test: sales volumes, Cigar Lake and new long-term contracts.
Cameco (CCJ) is down 11.9% in the past month (through Monday’s close), while the S&P 500 rose 0.6%.
And the uranium market couldn’t look much better. The long-term uranium price has climbed to $96 to $97 a pound, past the peak it set in 2007, according to Sprott and TradeTech.
Nuclear’s high-flyers dragged it down
Cameco had company. NuScale Power (SMR) fell 31.2% and Oklo (OKLO) 28.3% over the same month, in a sell-off across nuclear stocks.
None of Cameco’s three worst days (Sept. 23, Oct. 7 and Oct. 14) came with any company news. A 6.3% jump on Oct. 6 lasted a day, and Cameco gave most of it back on Oct. 7.
Cameco earned $1.44 a share on a normalized basis last year, and it’s trading like NuScale and Oklo anyway.
TIKR tracks 21 analysts on Cameco. How many say “Buy”?
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A US$120 billion reactor plan couldn’t stop the slide
On Sept. 30, the U.S. and South Korea announced a framework for Korea to put US$120 billion toward building Westinghouse reactor technology in the U.S. It covers up to eight large reactors: six AP1000s and up to two Korean APR1400s built on Westinghouse technology.
Cameco owns 49% of Westinghouse, and it expects a one-time waiver for those APR1400s to bring Westinghouse about US$2 billion of value per reactor.
But it’s still a framework. Sites, financing, regulatory approvals and final agreements are all still to come. As CEO Tim Gitzel put it on the Q2 call in July, “The next phase of nuclear growth will be defined by delivery.”
Westinghouse has also filed confidentially for a U.S. IPO, which could put a public price on Cameco’s stake.
The record price takes time to reach earnings
Cameco came into the month off a rough summer. It suspended its Cigar Lake mine on July 1 because of problems at Orano’s McClean Lake mill. Then Q2 adjusted EPS of C$0.18 missed the C$0.38 consensus by more than half.
The uranium price has a timing problem, too. Cameco sells under long-term contracts, so a record price reaches its earnings only as older, cheaper contracts roll off and new ones get signed. That’s how Cameco’s uranium earnings fell nearly 40% in Q2 even as prices rose.
Investors have responded by paying less for the story. Cameco’s forward P/E peaked at 111x in the spring, and it’s down to about 52x now.
Analysts still expect the earnings to arrive. They see normalized EPS roughly flat this year and then up more than 80% in 2027.
(Only four analysts estimate as far out as 2029, so the later years are the shakiest.)
Oct. 30 is the next test
Cameco reports third-quarter results on Oct. 30. Watch uranium sales volumes, how Cigar Lake has run since July’s suspension, and any new long-term contracts at today’s prices.
TD Cowen and Bank of America kept Buy ratings with targets near $135 in late September, and analysts’ average target was $128 at the start of October. Barclays is more cautious. On Monday it trimmed its target to $95 from $97 and kept an Equal Weight rating, though even that sits about 18% above Monday’s close.
Cameco’s slide this month came from a cooling nuclear trade while its own news, from the Korea framework to the uranium price, kept getting better.
My take: At about 52x forward earnings, roughly half its spring multiple, and with analysts expecting earnings to jump in 2027, Cameco looks like a reasonable buy for patient investors.
Of course, that case needs Oct. 30 to show higher prices making it into new contracts, and the Westinghouse framework is still a long way from a construction site.
So what is Cameco stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
