Jefferies Gives Cameco (CCJ) Stock a Buy Rating With $138 Price Target

Key Takeaways

• Jefferies launched coverage of Cameco (CCJ) with a Buy recommendation and set a $138 price objective (C$190 per share)
• Shares of CCJ jumped 3.4% on Thursday in response to the positive analyst initiation
• The investment firm simultaneously started coverage on BWX Technologies (BWXT) with a Buy rating and $181 target
• Wellington Management disclosed a new position of 2.09 million CCJ shares during the second quarter, worth roughly $212.9 million
• The company’s second-quarter results disappointed, with earnings of $0.13 per share falling short of the $0.26 analyst expectation

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Shares of Cameco (CCJ) advanced 3.4% during Thursday’s session following a favorable initiation by Jefferies, which assigned a Buy recommendation alongside a $138 price objective, equivalent to C$190. Laurence Alexander, the analyst covering the stock, emphasized Cameco’s standing as a leading global supplier of uranium fuel as a primary rationale for the optimistic stance.

Cameco Corporation, CCJ

Alexander identified accelerating demand for nuclear energy as the fundamental catalyst propelling the industry forward. He highlighted that over 30 nations have committed to tripling their nuclear generation capacity by mid-century, while major technology companies are securing long-term power agreements to support artificial intelligence data centers.

“With operational excellence and a robust financial position, Cameco stands out as, in our assessment, an ideal beneficiary of Western nuclear expansion,” Alexander stated in his research note.

The investment firm’s valuation methodology employed a sum-of-the-parts framework. Jefferies assigned $63 per share to upstream operations, $11 per share to conversion facilities, $7 per share to undeveloped assets and corporate functions, and $51 per share to Cameco’s strategic Westinghouse collaboration with the federal government.

BWX Technologies (BWXT) similarly benefited from Jefferies’ coverage launch on Thursday, rising 1.2% after receiving a Buy designation with a $181 price objective. Alexander underscored BWXT’s unique position as the exclusive provider of naval nuclear reactor parts and fuel for America’s fleet.

The firm anticipates BWX Technologies will achieve annual sales growth of 6% to 7% and earnings per share expansion of 13% to 17% extending through the decade’s end.

Major Funds Increase Positions

Wellington Management Group established a fresh stake in Cameco throughout the second quarter, accumulating 2.09 million shares with an approximate value of $212.9 million. This transaction provides Wellington with roughly a 0.48% ownership interest.

Additional institutional players have similarly expanded their allocations. Temasek Holdings initiated a new holding during the first quarter worth $70.9 million. Sumitomo Mitsui Trust Group expanded its investment by 35.2%, while Janus Henderson Group more than doubled its stake with a 102.3% increase. Institutional ownership in Cameco currently represents 70.21% of outstanding shares.

Recent Financial Results Disappoint

Contrary to the favorable analyst sentiment, Cameco’s latest quarterly performance fell short of expectations. The uranium producer delivered second-quarter earnings of $0.13 per share, significantly trailing the consensus forecast of $0.26. Total revenue reached $573.1 million, representing a 6.8% year-over-year decline and narrowly missing the $579.6 million projection.

This marks a substantial decrease from the $0.71 per share reported in the corresponding period one year earlier.

Wall Street analysts collectively forecast Cameco will generate $1.27 in earnings per share for the complete fiscal year.

The overall analyst community maintains a positive outlook on the shares. Thirteen research firms have assigned Buy recommendations to CCJ, while five rate it as Hold, producing a “Moderate Buy” consensus rating. The mean price target among analysts stands at $145.68.

Truist Financial elevated its price objective to $130 this past August while maintaining its Buy stance. Bank of America made a minor adjustment, reducing its target from $143 to $140 while preserving a Buy rating. Scotiabank continues with an Outperform designation and a $175 target.

CCJ trades within a 52-week band of $73.20 to $135.24, with shares positioned around $98.75 ahead of Thursday’s upward movement.

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