Jefferies covered nuclear energy stocks for the first time: Cameco (CCJ.US) and BWX Technologies (BWXT.US) were “bought”, and nuclear energy ushered in the strongest demand cycle in 40 years

The Zhitong Finance App learned that Jeffrey gave the two nuclear energy stocks Cameco (CCJ.US) and BWX Technologies (BWXT.US) a “buy” rating for the first time, with target prices of $138 and $181, respectively. It believes that the global nuclear energy industry is entering the strongest demand cycle in 40 years.

Jefferies analyst Laurence Alexander said that Cameco is one of the world's largest suppliers of uranium fuel. Using vertical integration of low-cost mine and nuclear reactor designs, it is in an advantageous position to obtain higher contract prices, covering delivery until 2040.

Alexander wrote that the company is “a major beneficiary of Western nuclear power construction” because more than 30 countries have promised to triple nuclear power production capacity by 2050, hyperscale data centers are taking on the basic load for artificial intelligence as electricity demand accelerates, and Russia's exclusion has also made nuclear energy conversion and enrichment reach an incentive level.

According to the segment valuation method, analysts estimate Cameco's upstream asset value to the end of 2027 at $63 per share, converted asset value of $11 per share, value of untapped resources and company assets of $7 per share, and value of the long-term Westinghouse partnership with the US government at $51 per share.

Alexander said he favors BWX Technologies because of the company's operational leverage in maintaining and expanding commercial nuclear power plants, and its unique position as the sole supplier of nuclear reactors and fuel for the US Navy allows it to avoid direct profit and loss fluctuations due to fluctuating uranium or concentrate prices.

Given the strong nuclear energy cycle, analysts expect BWX Technologies to achieve a 6%-7% increase in sales and a 13%-17% increase in earnings per share by 2030, and is likely to maintain this growth trend until 2040 without policy shocks.

Alexander also gave Denison Mines (DNN.US), EnCore Energy (EU.US), Mirion Technologies (MIR.US), NexGen Energy (NXE.US), and Solstice Advance Materials (SOLS.US) the first “buy” ratings, as well as Centrus Energy (LEU.US) and Centrus Energy (LEU.US) Uranium Energy (UEC.US) gave it a “hold” rating.