Global Nuclear Expansion Will Unlock Enduring Uranium Value

Key Takeaways

• Strong global uranium demand and supply deficits strengthen Kazatomprom's long-term pricing power, revenue growth, and earnings stability.
  
• Ongoing investment and downstream expansion support low-cost leadership and create new, higher-margin revenue streams.
  
• Supply constraints, rising costs, domestic allocation requirements, price volatility, and international expansion risks threaten margins, sales volumes, and future revenue stability.

Catalysts

Explores for, produces, processes, markets, and sells uranium and uranium related products in Kazakhstan, China, the Russian Federation, Canada, France, the United Kingdom, the United States, Jersey, Cayman Islands, the United Arab Emirates, and internationally.

• The structural underinvestment in new uranium mining capacity globally-combined with the slow pace, long lead times, and high development costs for new projects-is expected to lead to widening supply deficits in uranium in the next decade; as the world's largest, lowest-cost producer, Kazatomprom is positioned to benefit from higher uranium pricing and increased long-term contract volumes, supporting long-term revenue and net margin growth.
  
• Ongoing global momentum toward clean energy policies-with more countries pledging to triple nuclear capacity by 2050, extending reactor lifespans, and constructing new nuclear plants-drives durable demand for uranium; this increases revenue visibility for Kazatomprom through expanded and extended long-term offtake agreements.
  
• Heightened geopolitical focus on energy security and supply chain diversification, particularly in Europe and Asia, is incentivizing utilities to source uranium from stable, ESG-compliant producers such as Kazatomprom, enhancing the company's pricing power and long-term contract portfolio, stabilizing future earnings.
  
• The company's disciplined capital allocation and large-scale investments in greenfield exploration and production-expanding infrastructure-amid a tightening low-cost resource base globally-reinforces its ability to maintain low production costs and strong net margins as industry peers move up the cost curve.
  
• Kazatomprom's expansion into downstream nuclear fuel cycle activities (e.g., fuel pellets, assemblies) and potential international projects leverage its in-situ recovery expertise to unlock new revenue streams and higher-margin opportunities, supporting future EBITDA growth and margin expansion.

National Atomic Company Kazatomprom JSC Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming National Atomic Company Kazatomprom JSC's revenue will grow by 14.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from 32.0% today to 33.1% in 3 years time.
• Analysts expect earnings to reach KZT 868.3 billion (and earnings per share of KZT 3002.07) by about August 2028, up from KZT 562.6 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 KZT724.8 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.7x on those 2028 earnings, down from 11.1x today. This future PE is lower 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

• Continued sulfuric acid supply constraints and delays in constructing new acid plants could limit future uranium production growth, potentially capping sales volumes and restraining revenue growth over the next several years.
  
• Rising all-in sustaining and capital costs driven by development of greenfield assets, inflationary pressures, and the need to access higher-cost deposits may squeeze margins and erode net earnings, challenging Kazatomprom's historic low-cost production advantage.
  
• Kazakhstan's requirement to reserve increasing uranium production for domestic nuclear projects-such as the planned three nuclear power plants-may reduce exportable material, limiting Kazatomprom's sales capability and overall revenue potential in the global market.
  
• Volatility in spot uranium prices and KAP's high contract book exposure to spot-linked pricing could introduce earnings instability, especially if utilities' contracting activity declines or spot prices weaken due to changing market sentiment or increased global supply.
  
• Planned international expansion into jurisdictions such as Mongolia, Jordan, and Tajikistan exposes the company to geopolitical and execution risks, which could result in inefficient capital deployment or regulatory barriers, negatively affecting long-term returns and earnings quality.

Valuation

• The analysts have a consensus price target of KZT52.735 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 KZT58.91, and the most bearish reporting a price target of just KZT49.18.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be KZT2625.5 billion, earnings will come to KZT868.3 billion, and it would be trading on a PE ratio of 10.7x, assuming you use a discount rate of 8.0%.
• Given the current share price of KZT44.75, the analyst price target of KZT52.73 is 15.1% 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.