Cameco (CCJ) climbed 3.4% on Thursday after Jefferies initiated coverage of the stock with a Buy rating and a price target of $138 per share, equivalent to C$190. Analyst Laurence Alexander cited Cameco's standing as one of the largest global uranium fuel providers as a core reason for the bullish call. Cameco, headquartered in Saskatoon, Canada, is one of the few Western companies with integrated operations spanning uranium mining, refining, conversion, and fuel fabrication, which is central to its positioning as Western governments push to secure non-Russian nuclear supply chains.

Alexander pointed to growing nuclear power demand as the key driver for the sector. He noted that more than 30 countries have pledged to triple nuclear capacity by 2050, a commitment reaffirmed at recent UN climate summits, and that hyperscalers are signing baseload contracts to power AI infrastructure. Microsoft, for example, agreed in 2024 to procure power from the planned restart of a Three Mile Island unit, part of a broader wave of tech-driven nuclear contracting that has lifted demand expectations across the fuel cycle.

"Combining operating discipline and a strong balance sheet, Cameco is, in our view, a prime beneficiary of the West's nuclear build-out," Alexander wrote.

Jefferies built its valuation on a sum-of-the-parts basis. The firm valued upstream assets at $63 per share, conversion assets at $11 per share, undeveloped resources and corporate at $7 per share, and Cameco's long-term Westinghouse partnership with the U.S. government at $51 per share. That Westinghouse stake — Cameco holds 49% of the reactor and services firm alongside Brookfield — gives investors exposure to reactor servicing and new-build activity, not just uranium mining.

BWX Technologies (BWXT) also received a lift from Jefferies on Thursday, gaining 1.2% after being initiated with a Buy rating and a $181 price target. Alexander highlighted BWXT's role as the sole-source supplier of naval nuclear reactor components and fuel for the U.S. Navy. Jefferies projects BWX Technologies will deliver 6% to 7% sales growth and 13% to 17% earnings per share growth through 2030.

Institutional Investors Piling In

Wellington Management Group acquired a new position in Cameco during Q2, picking up 2.09 million shares valued at approximately $212.9 million. That gives Wellington roughly a 0.48% stake in the company.

Other institutional investors have also been adding exposure. Temasek Holdings took a new position in Q1 valued at $70.9 million. Sumitomo Mitsui Trust Group grew its stake by 35.2%, while Janus Henderson Group more than doubled its position, raising it by 102.3%. Institutional investors now own 70.21% of Cameco.

Earnings Miss Clouds the Picture

Despite the optimism from analysts, Cameco's most recent quarterly results were a soft spot. The company reported Q2 earnings of $0.13 per share, well below the $0.26 consensus estimate. Revenue came in at $573.1 million, down 6.8% year over year and just short of the $579.6 million forecast. That compares to $0.71 EPS in the same quarter last year. Analysts as a group expect Cameco to post $1.27 in earnings per share for the full fiscal year. As is common in the uranium sector, Cameco's results are sensitive to the timing of contractual deliveries, which can swing quarterly figures even when longer-term demand trends remain intact.

The broader analyst community remains constructive on the stock. Thirteen analysts carry a Buy rating on CCJ and five have a Hold, giving the stock a "Moderate Buy" consensus. The average price target sits at $145.68.

Truist Financial raised its target to $130 in August and kept a Buy rating. Bank of America trimmed its target slightly from $143 to $140 but also maintained a Buy. Scotiabank maintains an Outperform rating with a $175 target.

CCJ has a 52-week range of $73.20 to $135.24, with the stock trading near $98.75 before Thursday's move. Investors watching the sector will be looking to upcoming quarterly reports and any new long-term fuel contracts with utilities or hyperscalers as signals of whether the demand narrative is translating into financial results.

Source: CoinCentral