Uranium stocks are in focus following a high-profile warning from mining giant Kazatomprom, which earlier this month cut its production forecast due to a sulphuric acid shortage coupled with construction delays. This news follows a commitment by world leaders at the COP28 climate conference to invest heavily in nuclear energy - of which uranium (UXU24) is a critical component.
Against this backdrop, here's a closer look at three “strong buy”-rated uranium stocks that Wall Street analysts believe have plenty of upside potential yet to come.
Uranium Stock #1: Cameco Corp
Valued at $18.37 billion by market cap and based out of Canada, Cameco Corporation (CCJ) is one of the largest uranium producers globally. The stock has been a strong performer over the past year, up 46.7%.
Cameco is no small fry; they dig up about 18% of the world's uranium, mainly from their top-notch mines in Canada's Athabasca Basin. Late last year, they teamed up with Brookfield Asset Management to acquire a 49% stake in Westinghouse Electric Company, a nuclear services business.
In its Feb. 8 earnings report for Q4, CCJ fell short of EPS estimates with an adjusted profit of $0.16, but topped revenue expectations at $627.16 million. For fiscal year 2024, the consensus forecast is calling for EPS growth of 52.3%, and top-line growth of 17%.
Analysts are overwhelmingly bullish, with a “Strong Buy” consensus among the 9 analysts in coverage. Plus, the mean price target of $57.00 implies expected upside of 35% from Friday's close.
Uranium Stock #2: Ur-Energy Inc
With a market cap of just $460 million, Ur-Energy (URG) is largely focused on mining uranium out of the Lost Creek facility in Wyoming. The low-priced stock has rallied 47.8% over the past 52 weeks, though URG has pulled back 15% from the highs set earlier this month.
In its latest earnings report, URG swung to an unexpected per-share loss, even as the company topped consensus revenue estimates by raking in $5.75 million. Overall, Wall Street is expecting URG to achieve full-year profitability in 2024, with revenue projected to explode more than 170% to $51.62 million for the year.
B. Riley Financial recently started coverage of URG with a “Buy” rating and a $3 price target, which is a premium of 76% to current levels. Analyst Matthew Key anticipates the company could generate $100 million in adjusted EBITDA as Shirley Basin production comes online.
That upbeat opinion is right in line with the consensus, as all four analysts tracking URG are giving it a “Strong Buy” rating. The average price target is $2.53, nearly 49% above Friday's close.
Uranium Stock #3: Energy Fuels Inc
Energy Fuels (UUUU) stands out as the biggest uranium producer in the U.S., but they've also got a stake in the rare earth elements market - giving them a strategic edge in other green technologies, like electric vehicles (EVs) and wind energy. The Colorado-based company sports a market cap of $1.08 billion, though the shares have underperformed some of their peers by shedding 10% over the past year.
For Q3 2023, Energy Fuels reported adjusted earnings of $0.07 per share, and higher-than-expected revenue of $10.99 million. For fiscal 2024, Wall Street is targeting top-line growth of 31.4% to $56.29 million.
Now, uranium is still Energy Fuels' bread and butter, making up about 89% of their revenue over the first three quarters of 2023. But by early 2024, Energy Fuels is aiming to crank their rare earth element production up to 1,000 tonnes annually.
“Upon successful ramp-up of the modified SX circuit and receipt of sufficient monazite feed, Energy Fuels is expected to be the first U.S. company in many years with the ability to produce commercial quantities of NdPr oxide, which is a key ingredient in powerful permanent rare earth magnets used in electric vehicles, wind generators, and other technologies,” said CEO Mark Chalmers in the Q3 release.
Analysts are feeling pretty bullish about Energy Fuels, with a consensus “Strong Buy” rating among the 5 analysts in coverage - and not a single “Hold” or “Sell” to be found. The mean target price is $10.54, which would be a 62.6% jump from its current price.
