Uranium Stocks Soar On GLJ Upgrade: 33% Upside Seen For Cameco

Fast forward to today when Cameco (CCO which is its Canadian ticker, vs CCJ as it is known in the US) - which controls the world’s largest high-grade uranium reserves and low-cost operations and is one of the largest global providers of the uranium fuel - and the broader uranium sector soared following a report from GLJ Research in which analyst Gordon Johnson writes that a "Perfect Storm of Positive Developments Suggest it's Time to "Get Serious" About the Uranium Sector." Some of the note's highlights:

... in light of recent news and a slew of checks we’ve done in the space recently, we maintain our positive bias and C$27.00/shr 2021E price objective on CCJ’s shares (+33.3% upside from yesterday’s closing price). In short, the Uranium sector supply/demand balance is the tightest we've seen since pre-Fukushima. Furthermore, producers who account for over 50% of global supply are keeping capacity at bay for the sole purpose of driving Uranium prices higher. When you add to this Uranium stocks are now gaining attention from ESG investors due to their low GHG footprint and quintessential role as a clean energy alternative, we see the set-up for incremental/new Uranium investments as opportune. Under this backdrop, we prefer Cameco given its low-cost industry positioning and solid balance sheet - Cameco currently boasts a cash-to-debt ratio of 79.5%, which was enabled by the company fortifying its balance sheet during the most recent downturn.

GLJ then lists a number of positive data points that have helped push stocks higher

1) Uranium Sentiment: Physical fund Yellow Cake PLC raised $140mn, exercises $100mn Kazatomprom option to buy 3.5mn lbs U3O8 from depleted KAP stores now needing re-stocking;

2) Recent US Secretary of Energy (Nominee) Comment"I will work with the Department to continue to support the research, development, and demonstration of technologies to preserve our existing [nuclear] fleet, deploy advanced reactor technologies, and expand nuclear energy" 

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