Expanding Nuclear Build-Outs Will Spark Vibrant Uranium Markets

Key Takeaways

• Global uranium demand growth, supply constraints, and utility contract diversification position Kazatomprom for strong pricing power, revenue visibility, and profit margins.
  
• Industry-leading cost structure, resource replenishment, and expansion into downstream markets support long-term profitability and diversification opportunities.
  
• Rising input costs, regulatory hurdles, and geopolitical uncertainties threaten profitability and production stability, while evolving energy trends risk undermining long-term uranium demand.

Catalysts

Explores for, produces, processes, markets, and sells uranium and uranium related products.

• Global structural undersupply of uranium driven by increasing nuclear build-outs, plant lifespan extensions, and a lag in bringing new projects online is supporting a multi-year demand upcycle, positioning Kazatomprom for sustained pricing power and higher sales volumes-positive for revenue and margin growth.
  
• Major Western, Asian, and domestic utilities are intensifying efforts to diversify fuel sources and secure long-term supply contracts amid geopolitical tensions and potential sanctions on alternative suppliers, which supports a robust contract pipeline and longer-term revenue visibility for Kazatomprom.
  
• Kazatomprom's industry-leading cost structure due to its in-situ recovery mining and robust inventory discipline, combined with Kazakhstan's unique, low-cost geological advantages, ensures the company can maintain high profitability even as input and regulatory costs rise-positive for net margins and earnings stability.
  
• Ongoing large-scale exploration and resource base replenishment, backed by full government support, mitigates long-term depletion risks and underpins the company's ability to meet global demand and maintain output levels-supportive for sustained revenue and asset value.
  
• Initiatives to expand downstream nuclear fuel cycle capabilities and the emergence of significant domestic demand from new Kazakh nuclear reactors represent future opportunities for revenue diversification and enhanced earnings growth.

National Atomic Company Kazatomprom JSC Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming National Atomic Company Kazatomprom JSC's revenue will grow by 14.0% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 33.4% today to 30.5% in 3 years time.
• Analysts expect earnings to reach KZT 800.4 billion (and earnings per share of KZT 3029.58) by about September 2028, up from KZT 592.8 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting KZT1151.2 billion in earnings, and the most bearish expecting KZT627.7 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 11.6x on those 2028 earnings, up from 10.8x today. This future PE is greater than the current PE for the GB Oil and Gas industry at 11.5x.
• 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 8.0%, as per the Simply Wall St company report.

National Atomic Company Kazatomprom JSC Future Earnings Per Share Growth

Risks

• Rising operating costs, particularly from increased mineral extraction taxes and higher sulfuric acid prices (with sulfuric acid costs up 46% YoY and now making up a higher percentage of production costs), put pressure on net margins and earnings growth, especially if uranium prices do not rise commensurately.
  
• Production guidance has been revised downward, with the 2026 nominal production level expected to be around 10% lower than 2021 data due primarily to regulatory and environmental compliance (notably at JV Budenovskoye), indicating supply-side constraints that may cap revenue and impact long-term earnings stability.
  
• Persistent geopolitical uncertainty, including tariff wars, changes in global trade routes, and the need to utilize more expensive transportation options like the Trans-Caspian route, introduce unpredictability and could result in increased logistics costs, potentially reducing net profit margins.
  
• Dependence on periodic revisions of Subsoil Use Agreements, which are complex and subject to negotiation with government stakeholders, introduces regulatory and operational risks that may disrupt production consistency and create uncertainty in future revenue streams.
  
• Although there is strong industry demand, long-term growth could be undermined if accelerated deployment of renewables, growth in uranium recycling, or evolving nuclear technologies (including alternative fuel cycles and small modular reactors) reduce future uranium demand, negatively impacting Kazatomprom's top-line revenue.

Valuation

• The analysts have a consensus price target of KZT52.85 for National Atomic Company Kazatomprom JSC 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 KZT61.49, and the most bearish reporting a price target of just KZT49.71.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be KZT2623.3 billion, earnings will come to KZT800.4 billion, and it would be trading on a PE ratio of 11.6x, assuming you use a discount rate of 8.0%.
• Given the current share price of KZT45.85, the analyst price target of KZT52.85 is 13.2% higher.
• 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.