Cameco Corp upgraded to outperform at Raymond James

Cameco's Cigar Lake mine

Cameco Corp. was upgraded to outperform from market perform at Raymond James since it\’s Cigar Lake uranium project have turned the corner.

Analyst David Sadowski, who also raised his price target on the stock to $28 from $22, noted that what was once a major risk factor is now ramping up perfectly and makes Cameco’s growth guidance more realistic.

“Along with the long-dated and mostly priced-in nature of Cameco\’s tax dispute(s) as well as an improving macro uranium environment (underlined by what we view as Cameco\’s rosiest outlook rhetoric for a while), we believe the stock is poised for a market re-rating over the next 6C12 months,” he told clients.

Sadowski also considers Cameco the only real “blue chip\” in the sector, and it should benefit from the restart of Japanese nuclear reactors this summer, an acceleration of nuclear growth in Asia, constrained supply and, most significantly, more utility contracting.

Increased exposure to spot prices through Cameco’s recent supply agreement with India “further adds leverage to this potential upswing,” he said.

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