On February 9th, Cameco (TSX: CCO) reported its full-year 2021 financial results. The company reported full-year revenues of $1.47 billion, down 18% from 2020. Gross profits came in at $1.93 million, which is 0.1%, this is down from $106.45 million last year or down 98.2%. The company saw a negative operating profit of -$132.41 million, and reported a net income of -$102.58 million or an earnings per share of ($0.26).
The company noted that the company’s operations have been interrupted by COVID, with a 4-month suspension at Cigar Lake as a precaution, which only produced 6.1 million pounds below their committed sales. They also saw a $40 million care and maintenance cost due to this closure.
Cameco currently has 14 analysts covering the stock with an average 12-month price target of C$36.91, or a 30% upside to the current stock price. Out of the 14 analysts, 4 have strong buy ratings, 7 have buy ratings and the other 3 analysts have hold ratings. The street high sits at C$40.50, which represents a 42% upside to the current stock and the lowest 12-month price target comes in at C$30.
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In Canaccord Genuity’s note, they reiterate their buy rating and raise their 12-month price target from C$34 to C$37, saying that the company reported, “a number of positive developments this morning that support our broader market view that the fundamentals for uranium remain extremely strong.” They believe that the demand for nuclear power will continue to increase while the primary mine supply sits at a 12-year low.
Some takeaways from the news release include the addition of another 50 million pounds to their long-term contract portfolio, a restart of their McArthur River mine this year, and a 50% increase in their annual dividend to C$0.12.
On the call, Canaccord noted that Cameco’s management confirmed their view that 2022 could be the year that utilities come back to the long-term uranium market as management cited increased interest in on-market and off-market contracting.
Lastly, Canaccord believes that Cameco should be investors’ “go-to” stock for exposure to the uranium market and is a pure-play uranium producer listed in the U.S.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
