Cameco Acquires Westinghouse, Nuclear Demand Recovers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Business Overview: Cameco enhances its service capabilities in the nuclear sector through a 50% acquisition of Westinghouse, which, while a smaller part of overall revenue, provides a consistent income stream for the company.
- Market Volatility: The uranium mining and processing operations of Cameco are significantly affected by commodity price fluctuations, and although the company attempts to mitigate this through long-term contracts, large swings in uranium prices can still impact financial statements.
- Valuation Analysis: With a price-to-sales ratio of around 20, significantly above the five-year average of 8, and a price-to-earnings ratio of 130, Cameco's current stock price reflects optimistic market expectations regarding the nuclear revival, potentially exposing investors to overvaluation risks.
- Investment Recommendation: While Cameco is a well-run company and nuclear demand is recovering, the current high valuation suggests that investors should carefully assess whether it is prudent to buy the stock at this time.
Analyst Views on CCJ
Wall Street analysts forecast CCJ stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for CCJ is 105.67 USD with a low forecast of 71.80 USD and a high forecast of 118.78 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
11 Buy
1 Hold
0 Sell
Strong Buy
Current: 112.840
Low
71.80
Averages
105.67
High
118.78
Current: 112.840
Low
71.80
Averages
105.67
High
118.78
About CCJ
Cameco Corporation is a provider of uranium fuel to generate baseload electricity around the globe. Its segments include uranium, fuel services and Westinghouse. The uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The fuel services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion services. The Westinghouse segment reflects its earnings from this equity-accounted investment. Westinghouse is a nuclear reactor technology original equipment manufacturer and a global provider of products and services to commercial utilities and government agencies. It provides outage and maintenance services, engineering support, instrumentation and controls equipment, plant modification, and components and parts to nuclear reactors. It has two operating mines, Cigar Lake and McArthur River as well as a mill at Key Lake. It also has ownership interests in Global Laser Enrichment.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
