Jefferies initiated coverage of Cameco (CCJ) on Thursday with a Buy recommendation and a $138 price objective, equivalent to C$190, sending the stock up 3.4% during the session. Analyst Laurence Alexander cited Cameco's position as a leading global supplier of uranium fuel as a core reason for the bullish call.

Alexander pointed to accelerating nuclear energy demand as the fundamental driver for the industry. He noted that more than 30 nations have committed to tripling their nuclear generation capacity by mid-century, while major technology companies are securing long-term power agreements to support artificial intelligence data centers. The pledge to triple capacity, signed at the COP28 climate summit in December 2023, has helped revive Western government interest in nuclear power after a decade of plant retirements and post-Fukushima caution.

"With operational excellence and a robust financial position, Cameco stands out as, in our assessment, an ideal beneficiary of Western nuclear expansion," Alexander wrote in his research note.

Jefferies based its valuation on a sum-of-the-parts framework, assigning $63 per share to upstream operations, $11 per share to conversion facilities, $7 per share to undeveloped assets and corporate functions, and $51 per share to Cameco's strategic Westinghouse collaboration with the federal government (Investing.com). Cameco holds a 49% stake in Westinghouse Electric Company, which it acquired in 2023 alongside Brookfield Renewable Partners, giving the uranium producer exposure to reactor servicing and fuel fabrication across the nuclear value chain.

BWX Technologies Also Initiated at Buy

Jefferies simultaneously launched coverage of BWX Technologies (BWXT) with a Buy rating and a $181 price objective; the shares rose 1.2% on the news. Alexander highlighted BWXT's unique role as the exclusive provider of naval nuclear reactor parts and fuel for the U.S. fleet. The firm projects BWXT will deliver annual sales growth of 6% to 7% and earnings per share expansion of 13% to 17% through the end of the decade.

Major Funds Increase Positions

Wellington Management Group disclosed a new stake in Cameco during the second quarter, acquiring 2.09 million shares valued at roughly $212.9 million, giving it approximately a 0.48% ownership interest.

Other institutional investors have also expanded their allocations. Temasek Holdings initiated a new position worth $70.9 million in the first quarter. Sumitomo Mitsui Trust Group increased its investment by 35.2%, and Janus Henderson Group more than doubled its stake with a 102.3% increase. Institutional ownership of Cameco currently stands at 70.21% of outstanding shares.

Recent Financial Results Disappoint

In contrast to the favorable analyst sentiment, Cameco's most recent quarterly results fell short of expectations. The uranium producer reported second-quarter earnings of $0.13 per share, well below the consensus forecast of $0.26. Revenue totaled $573.1 million, a 6.8% year-over-year decline that narrowly missed the $579.6 million projection. The result also marked a steep drop from the $0.71 per share reported in the same period a year earlier.

Wall Street analysts collectively expect Cameco to generate $1.27 in earnings per share for the full fiscal year. Upcoming quarterly reports will show whether deliveries under long-term uranium contracts and progress at Westinghouse translate into results that support the bullish ratings.

The broader analyst community remains positive on the shares. Thirteen research firms rate CCJ a Buy and five a Hold, producing a "Moderate Buy" consensus with a mean price target of $145.68.

Truist Financial raised its price objective to $130 in August while maintaining a Buy rating. Bank of America trimmed its target from $143 to $140, also keeping a Buy rating. Scotiabank maintains an Outperform designation with a $175 target.

CCJ trades within a 52-week range of $73.20 to $135.24, with shares around $98.75 before Thursday's move.