Core Viewpoint - Cameco's recent fourth-quarter and 2024 results showed strong revenue growth, but the stock has declined due to concerns over annual earnings and specific operational challenges [1][2][32]. Financial Performance - Fourth-quarter revenues increased by 36.5% year over year to $846 million (CAD 1,183 million), surpassing the Zacks Consensus Estimate of $753 million [8]. - Earnings per share (EPS) for the fourth quarter were 26 cents (CAD 0.36), beating the consensus estimate of 23 cents [8]. - For 2024, revenues rose 21% year over year to $2.2 billion (CAD 3.14 billion), exceeding the Zacks Consensus Estimate of $2.15 billion [11]. - Adjusted EPS for 2024 was 47 cents (CAD 0.67), down 24% year over year but above the consensus estimate of 42 cents [12]. Production and Sales - In Q4, Cameco produced 6.1 million pounds of uranium, a 7% increase from the previous year, and sold 12.8 million pounds, a 30% increase [9]. - The average realized uranium price rose 12% year over year to $58.45 per pound, contributing to a 48% increase in uranium revenues [9]. - For 2024, uranium sales volume grew by 5% and prices increased by 17%, leading to a 24% increase in uranium segment revenues [11]. Operational Challenges - Production from the Inkai joint venture was 7.8 million pounds, with Cameco's share being 3.6 million pounds, which was 0.6 million pounds lower than in 2023 due to supply-chain issues [16]. - The new Mineral Extraction Tax (MET) in Kazakhstan will increase from 6% to 9% in 2025, impacting future production costs [17]. Dividend and Financial Strategy - Cameco increased its annual dividend by 33% to 16 cents per share and plans to implement a growth plan to reach 24 cents per share by 2026 [19]. - The company ended 2024 with C$600 million ($422 million) in cash and C$1.3 billion ($0.91 billion) in long-term debt, indicating a solid balance sheet for future investments [20]. Market Position and Outlook - Cameco's return on equity stands at 5.6%, significantly higher than the industry average of 1.7% [25]. - The stock is trading at a forward price-to-sales ratio of 7.71, above the industry average of 1.00, suggesting a premium valuation [26]. - The global focus on nuclear energy due to geopolitical events and climate concerns positions Cameco favorably to capitalize on rising low-carbon energy demand [28].

Group 1: Technical Analysis and Stock Performance - The 200-day simple moving average (SMA) is a significant technical indicator for traders, serving as a barometer for overall stock sentiment [1] - Stocks trading above their 200-day SMA may indicate overbought conditions, while those below may signal potential upward movement [1][2] - Freeport-McMoRan (FCX) stock is currently about 15% below its 200-day SMA and near its 52-week low, despite showing potential for sharp movements [6] Group 2: Freeport-McMoRan (FCX) Insights - FCX stock has a 12-month price forecast of $51.46, indicating a 39.20% upside based on 15 analyst ratings [3] - The stock is down 9.1% in the last six months, despite a 3.16% increase in 2025 [4] - The company is expected to resume copper shipments in February 2025, which could positively impact stock performance [5] Group 3: Generac Holdings Inc. (GNRC) Overview - Generac's stock has a 12-month price forecast of $174.00, suggesting a 26.20% upside based on 21 analyst ratings [7] - The company reported strong earnings due to stormy weather causing power outages, which has temporarily halted the stock's decline [8][9] - GNRC stock is consolidating around its 10-day SMA and is about 10% below its 200-day SMA, with the next earnings report expected in April [10] Group 4: Cameco Corp. (CCJ) Analysis - Cameco has a 12-month price forecast of $66.56, indicating a 52.81% upside based on 7 analyst ratings [11] - The stock has been in a bullish trend since 2020, with increased momentum in 2024 due to a positive shift in global attitudes toward nuclear power [12] - Cameco is expected to report significantly higher year-over-year revenue and earnings on February 20 [12][13]

Industry Overview - The nuclear energy sector is experiencing a resurgence, driven by increasing electricity demand and a renewed interest in nuclear power as a reliable energy source [4][22] - A potential uranium supercycle is emerging due to soaring demand and limited supply, making uranium mining companies attractive investment opportunities [1][9] Demand Drivers - Global electricity demand is projected to double from 460 terawatt-hours in 2022 to over 1,000 terawatt-hours by 2026, largely fueled by artificial intelligence, data centers, and cryptocurrency [2] - The electrification trend, including the rise of electric vehicles and industrial processes shifting towards electricity, further accelerates the need for clean energy sources [3] Supply Constraints - Uranium supply is constrained due to years of low prices post-Fukushima, leading to mine closures and reduced exploration [5] - Existing uranium stockpiles are depleting, and geopolitical risks in major production countries like Kazakhstan and Niger add complexity to the supply chain [6][7] Investment Opportunities - The convergence of high demand and limited supply indicates a prolonged period of rising uranium prices, presenting a strategic investment opportunity in uranium mining companies [9] - Cameco Corporation, as the largest publicly traded uranium producer, has a strong market position with a market capitalization of $20.84 billion and significant growth potential [12] - Energy Fuels, a US-based producer, is positioned to benefit from domestic energy security, with a market capitalization of $981.53 million and projected revenue growth [16] Investment Vehicles - The Global X Uranium ETF offers diversified exposure to the uranium mining sector, with $3.43 billion in assets under management and a focus on companies involved in uranium mining and nuclear components [19][20]

Group 1: Company Performance - Cameco Corporation reported a 21% year-over-year increase in sales for 2024, but earnings fell over 50% to $0.39 per share [2] - The company generated $482 million in positive free cash flow last year, resulting in a price-to-free-cash-flow ratio of 40 [4] - Despite a market valuation exceeding $19 billion, Cameco's earnings over the past 12 months were only $119 million, leading to a high price-to-earnings ratio of 162 [4] Group 2: Market Conditions - The uranium market has seen a significant decline, with prices dropping approximately 31% from highs near $95 per pound a year ago to around $65 per pound [2] - Current uranium prices are above the $60 breakeven point, which encourages miners to increase production, potentially leading to further price declines [3] - The outlook for nuclear power and nuclear fuel fundamentals is described as more favorable than it has been for decades, with management predicting strong financial performance to continue in 2025 [2]

Core Viewpoint - The uranium stock of Cameco is showing resilience and potential for growth, driven by strong financial performance and favorable market conditions in the nuclear energy sector [1][5]. Financial Performance - Cameco reported a 40% year-over-year increase in revenue for the fourth quarter and a 21% increase for the full year, primarily due to higher prices [2]. - The average realized price of uranium rose by 17% to $58.34 per pound, while sales volumes increased by 5% in 2024 [2]. - Despite a nearly 50% drop in net earnings for 2024, demand and sales remained strong [2]. Production and Operations - Production at Cameco's McArthur River/Key Lake mine reached a record high in 2024, attributed to advancements in automation and digitization [4]. - Production at the Cigar Lake mine fell short of expectations, but an increase in production is anticipated for 2025 [4]. - The company plans to produce a total of 36 million pounds of uranium in 2025, with 18 million pounds expected from each of its two mines [6]. Market Outlook - Management is optimistic about the nuclear power market, stating that the outlook for nuclear fuel fundamentals is more favorable than it has been for decades [5]. - The uranium market is shifting focus from spot prices to long-term contracts with utilities, which is beneficial for Cameco [5]. - As of December 30, 2024, Cameco had nearly 220 million pounds in long-term contracts and is actively discussing additional contracts, indicating a resurgence in utility interest in the uranium market [7]. Shareholder Returns - Cameco increased its annual dividend per share by 33% last year and expects this trend to continue, which is a positive signal for investors [7].

Financial Data and Key Metrics Changes - The company reported strong fourth quarter and annual results for 2024, with net earnings and adjusted net earnings reflecting a return to Tier-1 production levels, higher sales volumes, and improved average realized prices [10][29]. - The adjusted EBITDA from Westinghouse was noted as a better reflection of its strong underlying performance despite a full year net loss from Westinghouse due to purchase accounting [29]. Business Line Data and Key Metrics Changes - In the Uranium segment, the company delivered just under 34 million pounds of uranium in 2024, with production slightly exceeding expectations at approximately 23.4 million pounds, driven by strong performance from the McArthur River/Key Lake operation [30][32]. - The production at the McArthur River/Key Lake operation set a new annual production record, while production from Inkai was impacted by supply chain issues, resulting in a total of 7.8 million pounds, about 600,000 pounds lower than in 2023 [30][32]. Market Data and Key Metrics Changes - The long-term contracting volumes in 2024 remained below 120 million pounds, indicating a decline from previous years, but the company successfully negotiated off-market contracts, adding to its long-term portfolio [20][22]. - The company has commitments to deliver an average of about 28 million pounds of uranium over the next five years, with a total long-term book of business in the uranium segment now totaling approximately 220 million pounds [20][21]. Company Strategy and Development Direction - The company continues to focus on aligning production with its contract portfolio and market opportunities, emphasizing responsible supply management and operational efficiency [27][34]. - The strategic positioning in the nuclear sector is aimed at benefiting from expected growth while remaining protected against potential market fluctuations [26][27]. Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the nuclear power outlook, citing supportive market conditions and geopolitical factors that enhance energy security and clean energy needs [12][13]. - The company anticipates strong cash flow generation in 2025, supported by a disciplined strategy and a strong balance sheet [35][36]. Other Important Information - The company is monitoring potential U.S. tariffs on Canadian energy products and has taken proactive steps to mitigate any potential impacts [38][39]. - Recent developments include the resolution of a technology and export dispute involving Westinghouse, which is expected to enhance future cooperation and opportunities [37]. Q&A Session Summary Question: Update on contracting activity and market conditions - Management noted that while term volumes were down year-over-year, term prices increased significantly, indicating a shift towards recognizing the need for future supply [45][46]. Question: Impact of production suspension at Inkai - Management confirmed a strong long-term relationship with Kazatomprom and indicated that discussions are ongoing to assess the impact of recent production suspensions [56][57]. Question: Update on AP1000 builds and Westinghouse cooperation - Management expressed excitement about the Westinghouse deal and the potential for future cooperation, particularly in the context of new builds in various countries [62][64]. Question: Potential impact of lifting sanctions on Russia - Management emphasized that the growth plan does not depend on sanctions and that the supply-demand fundamentals remain strong regardless of geopolitical changes [78][80]. Question: Clarification on tariff responsibilities in contracts - Management explained that new contracts include clauses that place tariff responsibilities on customers, mitigating potential financial impacts [93][110].

Cameco (CCJ) Q4 2024 Earnings Call February 20, 2025 08:00 AM ET Company Participants Cory Kos - Vice-President of Investor RelationsTim Gitzel - President and Chief Executive OfficerAdam Wijaya - Equity Research AssociateGrant Isaac - Executive VP & CFOHeidi Shockey - Senior VP & Deputy CFO Conference Call Participants Andrew Wong - Equity Research AnalystAlexander Pearce - Equity Research AnalystOrest Wowkodaw - Managing Director, Senior Research Analyst, Metals and MiningLawson Winder - AnalystCraig Hutc ...

Core Viewpoint - Cameco Corporation (CCJ) is expected to report its fourth-quarter 2024 results on February 20, with earnings estimates showing a significant improvement compared to the previous year [1][2]. Financial Performance - The Zacks Consensus Estimate for CCJ's earnings is 23 cents per share, reflecting a 53% increase from the same quarter last year, with a 28% upward revision in estimates over the past 60 days [2]. - Revenue estimates for Cameco stand at $744 million, indicating a 20% growth from the prior year's quarter [3]. Earnings Surprise History - Cameco has missed the Zacks Consensus Estimate in each of the last four quarters, with an average negative earnings surprise of 66.60% [4][5]. Production and Sales Outlook - CCJ's expected uranium production share for 2024 is 23.1 million pounds, up from 17.6 million pounds in 2023, with a fourth-quarter target of 5.8 million pounds [8]. - The company plans to sell 32-34 million pounds of uranium in 2024, needing to sell 11.2-13.2 million pounds in Q4 to meet this target, an increase from 9.8 million pounds sold in Q4 2023 [9]. - Uranium spot prices averaged around $76.75 per pound in Q4, which is 7% lower year-over-year [9]. Operational Challenges - Cameco's Inkai mine is facing procurement and supply-chain issues, particularly with sulfuric acid deliveries, leading to a reduced production outlook [10]. - Annual UF6 production at Port Hope is projected to be between 11,000 and 11,500 tons for 2024, lower than previous expectations due to operational issues [11]. Fuel Services Segment - Fuel services production for 2024 is expected to be between 13.5-14.5 million kgU, with sales deliveries anticipated at 12-13 million kgU [12]. - Improvements in production and sales for fuel services are likely to positively influence CCJ's fourth-quarter performance [13]. Cost Management - The average unit cost of production at McArthur River/Key Lake is expected to be higher due to production ramp-up, while costs in the fuel services segment are also anticipated to be elevated [14]. - The company is making progress in reducing administration, exploration, and operating costs, which may help offset elevated costs on earnings [15]. Strategic Developments - In November 2023, CCJ acquired a 49% interest in Westinghouse Electric Company, with expected adjusted EBITDA contributions between $460 million and $530 million for 2024 [16]. Stock Performance - Shares of Cameco have increased by 11.9% over the past year, contrasting with an 8.6% decline in the industry [17].

Group 1 - The industry is expected to experience growth, with Cameco transitioning from a high-growth company to one with above-average but more mature growth over the next five years [1] - The uranium sector remains highly regulated, but increasing competition is anticipated over time, leading to a more stabilized mining industry benchmark for Cameco [1] Group 2 - Eric, who works at RBC Insurance on their investment team, holds a Master's degree in Financial Economics and has completed all three levels of the CFA program [1]

Industry Overview - Attitudes toward nuclear energy have fluctuated, particularly after the 2011 Fukushima disaster, leading to reduced investments and plans for new nuclear facilities [1][10] - Recently, there has been a resurgence of interest in nuclear energy as countries aim for net-zero emissions, positioning nuclear as a cleaner and reliable energy source [2] Cameco's Position - Cameco, one of the largest uranium producers globally, is strategically positioned to benefit from the renewed demand for uranium [3] - The company operates significant mining operations in Saskatchewan and the U.S., and holds a 40% interest in a joint venture with Kazatomprom in Kazakhstan [6] - Cameco produced an estimated 23.1 million pounds of uranium last year and has commitments for 29 million pounds per year through 2028 [7][13] Market Dynamics - The demand for nuclear energy is expected to increase, with initiatives like the Declaration to Triple Nuclear Energy aiming to triple nuclear capacity by 2050, supported by major financial institutions [5] - The U.S. Nuclear Regulatory Commission is exploring the possibility of bringing retired nuclear facilities back online, which could further boost demand [8] Financial Performance - Cameco's recent third-quarter earnings were disappointing, with a net loss and a high valuation at nearly 262 times its trailing-12-month earnings [11] - Despite the high valuation, forecasts suggest uranium prices could average around $110 per pound this year, driven by demand outpacing supply [12] Long-term Outlook - The International Atomic Energy Agency (IAEA) projects that nuclear capacity could increase by as much as 2.5 times by 2050, indicating strong long-term demand for nuclear energy [12] - Given the solid foundation and commitments from buyers, Cameco is viewed as a stock to hold for long-term benefits from shifting trends in the energy sector [13]