Cameco Corporation: Buy, Sell, or Hold?

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]