Goldman is bullish long term on nuclear power and uranium. This stock is a key way to gain exposure

Published Mon, May 6 202411:08 AM EDTUpdated Mon, May 6 20243:28 PM EDT

Cameco , one of the world's largest publicly traded uranium miners, is positioned for long-term growth despite lackluster first-quarter results, as Western power companies seek secure nuclear supply chains, according to Goldman Sachs. Goldman has raised Cameco's 12-month stock price target by $1 to $56, implying 15.7% upside from Friday's close. Shares of the Canadian miner fell more than 7% after the company reported a first-quarter loss of $7 million on April 30, down from the $119 million profit in the year-ago period. Cameco then bounced 6% to recoup most of those losses through Friday's close. CCJ YTD mountain CCJ 3-mo chart "We continue to see CCJ as a key means of gaining exposure to the entire value chain of uranium," Goldman analysts lead by Neil Mehta told clients in a note Monday. Uranium prices have been on a tear over the past 12 months, with the Global X Uranium ETF (URA) up 53% during that period. Though Cameco's sales of 7.3 million pounds of uranium in the quarter missed guidance of 8.25 million pounds, the company maintained its full-year guidance of 32 million pounds to 34 million pounds. Cameco's stock is still up about 16% for the year and nearly 80% over the past 12 months. "We continue to believe that an increased need to source volumes from lower geopolitical risk jurisdictions and from low cost providers is likely to drive a migration of imports from Canada and as a result from Cameco, driving both volume and price benefits for the company," Mehta and his team told clients. Governments around the world increasingly view nuclear power as a key pillar of the energy transition because the technology can provide reliable carbon-free energy at a time when electricity demand is rising. Western countries are seeking secure supplies of uranium to support a nuclear buildout, rather than relying on Russia or neighboring Kazakhstan. The U.S. Senate passed legislation to completely ban imports of Russian low-enriched uranium in 2028. Power companies are required to seek alternative sources of uranium 90 days after President Joe Biden signs the legislation, unless the secretary of energy grants a waiver. The waivers would expire in 2028.