CCO: Shareholder Value Will Rise On Takeover Momentum And Asset Sale Progress

Analysts have trimmed their price target on Cameco slightly to about $150.81 from $151.75, reflecting expectations for stronger long term revenue growth, but a modestly lower profit margin and still elevated valuation multiples.

Analyst Commentary

Analysts covering Cameco have been reassessing their views in light of the recent price target trim, balancing the company’s strong long term growth drivers against execution and valuation risks.

Bullish Takeaways

Bullish analysts highlight Cameco’s levered exposure to structurally tighter uranium supply, which they believe can support above market volume growth and pricing power over the next cycle.
They point to a healthy contract backlog and improving contract terms as evidence that Cameco can translate favorable industry fundamentals into durable revenue visibility.
Upside to long term earnings is seen if Cameco executes on planned capacity ramp ups and maintains operational discipline, allowing incremental volumes to fall through at attractive margins.
Bullish analysts also argue that premium valuation multiples can be sustained if Cameco continues to consolidate its position as a key supplier to utilities seeking diversification and security of supply.

Bearish Takeaways

Bearish analysts caution that even after the modest target reduction, Cameco’s valuation already discounts a robust multi year recovery, leaving limited room for error on production or cost execution.
There is concern that cost inflation and project complexity could cap margin expansion, especially if new capacity is brought on line more slowly or at higher than expected operating costs.
Some also flag the risk that a slower than anticipated pace of utility contracting, or softer spot pricing, could delay the realization of the growth embedded in current forecasts.
Bearish analysts note that any adverse regulatory, geopolitical, or supply chain developments in key regions could weigh on Cameco’s ability to deliver on its long term growth narrative and justify current multiples.

What's in the News

Cameco raised its annual dividend to CAD 0.24 per common share, payable on December 16, 2025, signaling confidence in long term cash flow generation.
The company issued 2025 guidance calling for revenue between $3.3 billion and $3.55 billion and up to 20 million pounds of U3O8 production share, underscoring expectations for higher volumes and pricing.
Third quarter 2025 uranium production inched up to 4.4 million pounds from 4.3 million pounds a year earlier, while year to date uranium output fell to 15.0 million pounds from 17.3 million pounds, reflecting ongoing ramp up dynamics and mine planning.
Cameco and Brookfield Asset Management entered a strategic partnership framework with the US Department of Commerce to accelerate deployment of Westinghouse nuclear reactors, with US backed financing targeting at least USD 80 billion in aggregate investment, including support for AI related power demand.
Cameco signed a long term agreement to supply natural uranium hexafluoride to Slovenske elektrarne in Slovakia through 2036, enhancing the utility's fuel diversification and Cameco's contracted sales base in Europe.

Valuation Changes

Fair Value Estimate was trimmed slightly to CA$150.81 from CA$151.75, reflecting minor adjustments to long term assumptions while keeping the overall outlook largely intact.
The Discount Rate was effectively unchanged at about 6.12 percent, signaling a stable risk profile and cost of capital in the valuation framework.
Revenue Growth was raised meaningfully to roughly 7.37 percent from 6.29 percent, indicating stronger expectations for long term top line expansion.
Net Profit Margin was reduced modestly to about 35.30 percent from 36.43 percent, incorporating higher cost assumptions and more conservative margin expectations.
The Future P/E Multiple edged down slightly to around 51.8x from 52.0x, suggesting only a minor recalibration of Cameco’s expected valuation premium.

Cameco is set to benefit from increasing global nuclear energy demand, policy support, and supply constraints, supporting long-term growth and pricing power.
Strategic utility contracting and disciplined production enable Cameco to capitalize on higher uranium prices and future reactor projects for margin expansion.
Delays in nuclear projects, operational and supply chain risks, and limited contracting activity threaten Cameco's revenue growth, profit margins, and earnings stability.

Catalysts

About Cameco

Provides uranium for the generation of electricity.What are the underlying business or industry changes driving this perspective?

Cameco stands to benefit from a global wave of new nuclear construction, driven by heightened government policy support, net-zero emission mandates, and growing energy security concerns-factors likely to accelerate demand for uranium and nuclear fuel, directly supporting higher long-term revenues.
Momentum in utility contracting is building, but current volumes are subdued; as uncovered utility uranium needs through 2045 accumulate, the eventual surge in term contracting is expected to drive material price and volume upside, improving both Cameco's revenue growth and pricing power (with likely gains to net margins).
Westinghouse (Cameco's 49% share) is poised for significant upside as dozens of planned gigawatt-scale reactors in the US, Europe, and Asia reach final investment decision (FID)-these builds are not yet in current business guidance, suggesting meaningful forward earnings and EBITDA improvement as project approvals materialize.
Established Tier 1 production assets and a disciplined strategy of only bringing supply online in step with contract demand allow Cameco to capitalize on rising uranium prices without risking oversupply; this operational leverage supports margin expansion when demand materializes.
Ongoing structural supply constraints in the uranium sector, combined with years of underinvestment and the need for Western-aligned, geopolitically secure fuel suppliers, further enhance Cameco's long-term volume and pricing opportunities, underpinning stronger forecast cash flows and sustained profitability.

Cameco Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Cameco's revenue will grow by 2.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 14.9% today to 31.6% in 3 years time.
Analysts expect earnings to reach CA$1.2 billion (and earnings per share of CA$2.8) by about September 2028, up from CA$533.6 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting CA$1.3 billion in earnings, and the most bearish expecting CA$873 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 48.7x on those 2028 earnings, down from 86.9x today. This future PE is greater than the current PE for the US Oil and Gas industry at 12.2x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 5.97%, as per the Simply Wall St company report.

Cameco Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Delays and bottlenecks in final investment decisions (FID) for new nuclear reactor projects globally mean that many anticipated demand drivers for uranium and nuclear services are not yet included in Cameco's business outlook, risking slower revenue and earnings growth if these projects are further pushed out or canceled.
Persistent operational challenges at key assets like McArthur River-including labor shortages, equipment commissioning issues, and the technical complexity of mining new areas-create significant production risk, which could lead to lower revenues and higher costs if mining targets are missed.
Cameco's uranium cost advantage benefited in the current period from drawing down low-cost inventory, but future periods will see higher-cost purchases making up a larger share of supply, which may compress net margins if uranium market prices do not rise accordingly.
Ongoing supply chain, geopolitical, and transportation risks-especially regarding deliveries from JV Inkai in Kazakhstan via the Trans-Caspian corridor-could disrupt Cameco's ability to source and deliver contracted uranium, impacting revenue and profitability.
Market uncertainty and slow pace of long-term uranium contracting (with both spot and term contracting volumes down year-over-year) suggest utilities are deferring purchases, and without a sustained pick-up in contracting activity, Cameco may struggle to lock in future revenues, exposing earnings to volatility if demand does not materialize as expected.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$114.75 for Cameco based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$131.0, and the most bearish reporting a price target of just CA$100.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$3.9 billion, earnings will come to CA$1.2 billion, and it would be trading on a PE ratio of 48.7x, assuming you use a discount rate of 6.0%.
Given the current share price of CA$106.49, the analyst price target of CA$114.75 is 7.2% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Long-Term Profit Margins And Contracts Will Drive Future Value