Summary of Cameco and Westinghouse Conference Call Company and Industry Overview - **Company**: Cameco Corporation - **Industry**: Nuclear Energy and Uranium Mining Key Points and Arguments 1. **Nuclear Power Renaissance**: The analysis indicates that the nuclear power sector is experiencing a renaissance, providing clean and green baseload electricity for future economies. This is expected to positively impact uranium prices and reactor announcements in 2026 [1][3]. 2. **Cameco's Valuation**: Cameco's share price has more than doubled in the last year, leading to discussions about justifying its current valuation. A bullish discounted cash flow (DCF) model supports the view that Cameco's valuation is reasonable [1][7]. 3. **Uranium Mining Segment**: Cameco's uranium mining segment is highlighted as having high certainty and low-cost, high-quality resources. Long-term contracted uranium prices have risen significantly, with January prices up over 20% annually since 2022 [3][4]. 4. **Westinghouse Contribution**: Westinghouse is a significant part of Cameco's valuation, contributing 45% in the base case and 50% in the bull case. The addressable market for Westinghouse is expected to grow, enhancing its long-term value [5][10]. 5. **Global Laser Enrichment (GLE)**: GLE is considered an underappreciated segment of Cameco, contributing 11% to the company's value. The analysis models GLE as a two-stage option, with potential for significant future contributions [6][11]. 6. **Target Price Increase**: The target price for Cameco has been raised to $147, reflecting a 23x EV/EBITDA multiple on projected 2030 EBITDA. This target is approximately 30% above consensus estimates, indicating a more optimistic long-term outlook [7][9]. 7. **Investment Implications**: The recommendation for Cameco is to outperform, with a valuation of $147 per share based on a 23x EV/EBITDA multiple. This reflects expectations of inflection in earnings power and long-term exposure to uranium prices [9][10]. 8. **Operating and Maintenance (O&M) Budget**: The global nuclear power industry's annual O&M budget is estimated at $116 billion, projected to grow to between $167 billion and $327 billion by 2040. Westinghouse is expected to capture a significant share of this market [19][32]. 9. **Future Reactor Growth**: The number of nuclear reactors is expected to grow significantly, with projections indicating a substantial increase in nuclear generation from 3,000 TWh to over 4,000 TWh by 2040 [28][49]. 10. **Financial Forecasts**: Cameco's EBITDA is projected to grow significantly, with a forecast of CAD$ 3.5 billion by 2030. The company is expected to maintain strong operational performance despite market fluctuations [55][57]. Additional Important Insights - **Market Dynamics**: The analysis suggests that while the uranium market is currently favorable, there are risks associated with the finite nature of uranium assets and the expertise required to operate in this sector [3][4]. - **Long-term Contracts**: The long-term contracted prices for uranium are seen as a more stable indicator of market conditions compared to spot prices, which can be volatile [3][4]. - **Westinghouse's Market Share**: Westinghouse's revenue is currently 11% of the total addressable spend in the nuclear sector, with potential for growth as the market expands [38][44]. - **Capex Opportunities**: The new build opportunity for Westinghouse is estimated to average $71 billion annually by 2040, indicating significant potential for revenue growth in the future [42][46]. This summary encapsulates the key insights and projections regarding Cameco and the nuclear energy sector, highlighting both opportunities and risks in the current market landscape.

Core Insights - NuScale Power aims to establish itself as a manufacturer of small modular nuclear reactors (SMRs) amidst a nuclear power renaissance, presenting significant opportunities for growth, although it has yet to make its first sale [1][2]. Company Overview - NuScale Power is categorized within the nuclear energy sector, focusing on the production of SMRs, which differ from traditional large nuclear plants as they are manufactured in factories, allowing for efficiencies through scale production [2]. - The company is currently in discussions to sell six reactors to RoPower, a Romanian power company, but has not finalized any sales agreements yet [5]. Financial Outlook - The market capitalization of NuScale Power is approximately $4.9 billion, with a current stock price of $16.48, reflecting a day’s change of -5.72% [7]. - The company has a gross margin of 64.95%, indicating potential profitability once sales commence [7]. Future Prospects - If NuScale Power successfully builds a substantial business, it may eventually pay dividends, although such payments could be years away [4]. - The company faces challenges in building its manufacturing capacity, which will require significant capital investments to scale operations [7]. Investment Considerations - Given the current uncertainties surrounding NuScale Power's ability to secure customers and finalize contracts, it is suggested that most investors should wait until the company has successfully built a few SMRs before considering investment [8].

Core Insights - The Range Nuclear Renaissance Index ETF has experienced a significant increase of 58% over the past year, driven by growing enthusiasm for nuclear power [1] Industry Summary - The surge in interest for nuclear power has been notably influenced by announcements from major companies like Microsoft and Amazon, which plan to utilize small modular reactors to power their data centers [1]

Core Viewpoint - The nuclear power sector is gaining momentum, with President Trump aiming to quadruple U.S. nuclear power output by 2050, creating a favorable environment for investment in nuclear stocks, particularly Fluor [1]. Industry Overview - The U.S. government is accelerating nuclear power development through executive orders, including a commitment to approve new reactor licenses within 18 months and a pilot program for three experimental reactors by July 2026 [5]. - The Department of Energy plans to deploy advanced small modular reactors by the end of 2027 and aims for at least one operational nuclear reactor on a military base by September 2028 [5]. Company Analysis: Fluor - Fluor is identified as a strong investment opportunity in the nuclear sector, with a 19% stock increase over the past year, outperforming the S&P 500 [4]. - The company holds a majority interest in NuScale, which has a market capitalization of $10.3 billion, while Fluor's market cap is only $8.7 billion, indicating a potential undervaluation [7]. - Analysts project Fluor's earnings to be $470 million in 2026, $530 million in 2027, and $638 million in 2028, suggesting a stable earnings growth trajectory [8]. - Fluor's price-to-earnings ratio is estimated at 18.5 times forward earnings, which is considered reasonable given the expected earnings growth [9]. - The company is expected to generate positive free cash flow of $343 million this year, with a forecasted growth rate of over 20% annually for the next three years [10]. - Fluor's enterprise-value-to-free-cash-flow ratio is projected to be 21, indicating a favorable valuation compared to other nuclear companies that are not profitable [11].

Core Viewpoint - Vistra's stock has seen significant growth over the past year, but recent warnings about the challenges of a nuclear power renaissance in the U.S. may impact future performance [1][4]. Group 1: Stock Performance - Vistra's shares have increased by over 120% in the past year, driven by expectations of rising demand for nuclear power due to AI's energy needs and support from President Trump [3]. - However, shares fell by 4.1% following concerns about the feasibility of the nuclear renaissance plan [1]. Group 2: Nuclear Renaissance Challenges - The target set by President Trump for the Nuclear Regulatory Commission to approve reactor design applications within 18 months is considered aggressive and potentially unrealistic, as typical approval times can extend to five years [4]. - The Journal suggests that any growth in nuclear power supply may come from extending licenses of existing reactors or restarting closed reactors, rather than new constructions [4]. Group 3: Financial Outlook - Analysts project strong earnings growth for Vistra, forecasting over 20% annual growth, which could justify the stock's current valuation of 27.5 times earnings [5]. - Vistra's stock appears approximately 20% cheaper when assessed on free cash flow (FCF) compared to GAAP earnings, with a valuation of 23 times FCF and a modest dividend yield of 0.5% [6].

Industry Overview - President Trump signed an executive order to boost the nuclear energy industry, aiming to overhaul the Nuclear Regulatory Commission and expedite the development of new nuclear power reactors [1] - The executive order is expected to catalyze a resurgence in the nuclear sector, potentially leading to increased demand for nuclear energy [1] Company Insights: NuScale Power - NuScale Power's stock surged following the executive order, reaching all-time highs, although the company currently lacks a marketable product [4][6] - The company is developing small modular reactors (SMRs), which are cheaper and quicker to build compared to traditional nuclear plants, and can be transported closer to population centers [7] - A significant milestone for NuScale will occur in 2025 when RoPower decides on purchasing six SMRs, which could pave the way for future contracts [8] Company Insights: Constellation Energy - Constellation Energy is the leading nuclear power producer in the U.S., with a capacity of 22.1 gigawatts, significantly higher than its nearest competitor [10] - The company sells power under long-term fixed-rate agreements, allowing it to benefit from rising power rates [11] - Constellation is investing in clean energy, including a partnership with Microsoft to restart the Three Mile Island Unit 1 nuclear plant, and is exploring SMR opportunities [12][13] - The company anticipates over 13% compound annual growth in adjusted operating earnings through 2030, with potential for accelerated growth if it finalizes its acquisition of Calpine [14] Company Insights: Cameco - Cameco is positioned to benefit from increased uranium demand as the U.S. aims to quadruple its nuclear energy capacity by 2050 [15] - The company highlighted that nearly 70% of the uranium requirements for future nuclear reactors remain uncovered, indicating a need for approximately 3.2 billion pounds of uranium by 2045 [17] - As one of the largest uranium producers, Cameco is experiencing increased long-term contracting activity and holds a 49% stake in Westinghouse Electric, enhancing its competitive edge [18] - Cameco has a strong financial position, having paid dividends annually since 1991, with a 33% increase last year, making it a favorable investment in the nuclear sector [19]