Cameco goal hiked on enhanced uranium fundamentals Monetary …

TD Securities analyst Greg Barnes hadn’t raised his worth goal on Cameco Corp. for the reason that Fukushima challenge started out in March 2011. However he modified that on Monday, upping his 12-month outlook on the inventory to $22 from $20.

He elevated his goal EV/EBITDA a couple of on Cameco to 12x from 11x to replicate rising self assurance in uranium market fundamentals, which might be essentially as a result of provide self-discipline.

Mr. Barnes additionally believes the associated fee of uranium seemingly dependent a backside within the mid-US$30 per pound vary.

The analyst cited Cameco’s share value has risen according to mine provide curtailment bulletins from Kazatomprom and Rosatom, in addition to a latest leap within the spot value to roughly US$36.50.

He additionally believes stories in regards to the finish of the Russia-U.S. extremely-enriched uranium (HEU) settlement has more desirable investor sentiment, because the lack of roughly 24 million kilos of uranium provide must lend a hand rebalance provide/demand fundamentals over the medium time period.

“Our place has lengthy been that utilities are neatly-placed for the tip of the HEU settlement by the use of elevated inventories and contractual provide commitments such that the discount in provide must have minimal influence on the uranium market within the close to time period,” Mr. Barnes stated.

The analyst’s forecasted dip in 2014 cash for Cameco displays the shortage of HEU-derived uranium gross sales starting that yr.

He additionally referred to that the introduced provide cuts will have to lend a hand offset elevated manufacturing from Cameco’s Cigar Lake mine, the place manufacturing is predicted to start within the first quarter of 2014.

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