Along with lithium, uranium (UXJ24) has emerged as one of the most critical minerals of our times. With widespread applications in sectors like energy, medicine, industrial, and military, the global uranium market size is projected to touch $11.39 billion by 2030. Moreover, a report by Statista indicates that global demand for uranium will be 209 million pounds by 2035 - and that the supply of uranium is expected to drop over time.
And this sentiment is shared by the world's largest uranium company, as well.
Kazatomprom (NATKY), which produced 11,373 metric tons of uranium in 2022 (out of Kazakhstan's total of 21,227 metric tons), sent spot uranium prices soaring when it said last week, "In the current pricing environment another Kazatomprom-sized supply source will be needed to cover future market needs." This comes on the heels of the company's cautious note earlier in the year, when it warned that its production targets will fall short over the next two years.
Amid rising demand and tight supplies, here are three top-rated uranium stocks that investors can consider to gain exposure to this vital metal.
Uranium Stock #1: Cameco
Founded in 1988 by the merger between Crown Corporation Saskatchewan Mining and Development Corporation and Canadian Uranium Resources Inc., Cameco Corp (CCJ) is the world's largest publicly traded uranium company. Its primary focus is on exploration, mining, milling, and conversion of uranium into fuel for nuclear power plants, with additional focus on refining, fuel manufacturing, and investments across the nuclear fuel cycle.
Currently commanding a market cap of $18.23 billion, Cameco stock is up 68.8% over the past year.
Cameco posted upbeat results for the fourth quarter, with revenue, earnings, and production volumes all on the rise. Revenues for the quarter came in at $627.16 million, up 61.1% from the previous year, aided by a 54% yearly jump in uranium production volume to 5.7 million pounds.
Although Q4 EPS of $0.16 missed the consensus estimate, CCJ's net earnings rose by a considerable 133.3% from the previous year. Likewise, cash from operations more than doubled on a year-over-year basis.
Cameco has long-term commitments for 205 million pounds of uranium, with 37 customers worldwide, which represents about 20% of its reserves. Also, the company is expecting 18 million pounds of uranium production each for both the McArthur River/Key Lake (70% stake) and Cigar Lake (55% stake) mines. In total from its interest, it is looking for a total of 22.4 million pounds of production, and to sell between 32-34 million pounds.
The company isn't neglecting its fuel services business, either, as it is increasing its 2024 UF6 production at Port Hope to 12,000 tonnes, which would represent record production for the facility. Overall production is expected to range between 13.5-14.5 million kgU, with sales of 12-13 million kgU.
Analysts have deemed CCJ stock a "Strong Buy," with a mean target price of $57.71 - which indicates an upside potential of about 34.6% from current levels. Out of 9 analysts covering the stock, 6 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating and 1 has a “Hold” rating.
Uranium Stock #2: Nexgen Energy
Based out of Vancouver, Nexgen Energy (NXE) was founded in 2011. It focuses on developing uranium mines, with the Rook I Project being its primary initiative. Their goal is to make it the world's largest and lowest-cost producing uranium mine, while adhering to high standards for environmental and social governance. It currently commands a market cap of $4.09 billion.
Nexgen Energy stock has more than doubled over the past year, up 103.9% over this period.
The uranium exploration company is pre-revenue, and reported an adjusted loss of $0.06 per share for the fourth quarter. However, it exited the quarter with a cash balance of $290.7 million, improved from the previous year's $134.5 million.
NexGen's crown jewel, the Rook I project, holds the world's largest undeveloped high-grade uranium deposit, the Arrow. Located in Saskatchewan's Athabasca Basin, a premier mining region, Rook I boasts a massive 257 million pounds of uranium resources at an impressive 3.10% grade. Notably, the high-grade portion, constituting roughly 60% of the resource, is exceptionally rich, containing a whopping 17% uranium. Further enhancing the project's value, a significant portion of this high-grade uranium is classified as reserves. A 2021 feasibility study confirmed 240 million pounds of reserves with a grade of 2.37% uranium.
Additionally, NexGen recently unearthed significant new uranium mineralization on its wholly-owned SW2 Property, just 3.5 kilometers east of the Arrow deposit.
Analysts have a consensus rating of “Strong Buy” for the stock, with a mean target price of $9.56. This denotes an upside potential of roughly 23.7% from current levels. Out of 7 analysts covering the stock, 3 have a “Strong Buy” rating and 4 have a “Moderate Buy” rating.
Uranium Stock #3: Ur Energy
Wyoming-based Ur Energy (URG) is a uranium mining company founded in 2006. It focuses on unconventional mining techniques, such as the environmentally friendly in situ recovery (ISR) method to extract uranium from underground deposits.
Its market cap currently stands at $442 million, and Ur Energy stock has gained 72.4% over the past year.
In Q4, Ur Energy produced U3O8 of 90,000 pounds, which it sold for $5.441 million. Further, the company expects its 2024 production from Mine Unit 2 of the Lost Creek operations to range between 650,000 and 750,000 pounds.
Also in the quarter, the company signed its fourth agreement to deliver about 100,000 to 350,000 pounds of U3O8 from 2026 through 2030. Further, it has also signed a fifth sales agreement to deliver uranium for five years beginning in 2026, with an initial delivery of 50,000 pounds in 2026.
Overall, 4 analysts have unanimously rated Ur Energy stock a “Strong Buy” with a mean target price of $2.70. This indicates an upside potential of 69.3% from current levels.
