Cameco Corp. Stock (CCJ) Approaching Double YTD Into Earnings

Cameco Corporation (NYSE: CCJ), a global leader in uranium production, finds itself at an interesting point as it heads into its Q3 2025 earnings release tomorrow. Trading at $97.77 per share in today's pre-market, Cameco ‘s stock is down 3% on the session, although within striking distance reaching a double on a YTD. The question now is if Cameco will deliver the results needed to push it past the $100 psychological barrier, or will market headwinds temper expectations?

Analysts expect CCJ to report a EPS of $0.28, up significantly from a year-ago EPS of –$0.01, implying a strong rebound in profitability. On the revenue front, the consensus estimate sits at US$749.6 million, reflecting sales growth of about 4.0% year-over-year.

Cameco's recent strategic moves have undoubtedly contributed to market optimism. The September 12th announcement of a partnership with the U.S. government and Brookfield Asset Management to accelerate the deployment of Westinghouse nuclear reactors is a significant development. This collaboration, part of an $80 billion nuclear power pact, underscores the growing importance of nuclear energy in the global transition to cleaner energy sources. Cameco's involvement positions it to capitalize on this trend.

Cameco's recent financial performance provides a solid foundation for continued growth. In Q1 2025, the company reported net earnings of $70 million and adjusted EBITDA of $353 million. Revenue increased by 24% to $789 million, with gross profit growing by 44% to $270 million. The uranium segment saw production of 6.0 million pounds, with average realized prices rising 9% to $62.55 per pound. Even Westinghouse showed improvement, reducing its net loss compared to the previous year.

Analysts are generally optimistic about Cameco's prospects, with Wall Street Zen recently upgrading the stock rating from “hold” to “buy.” Other analysts, including those from CLSA and Royal Bank of Canada, have also issued “outperform” ratings, with price targets ranging from $100 to $110. These positive assessments reflect confidence in Cameco's strategic initiatives and financial health.

Cameco's commitment to returning value to shareholders is evident in its dividend growth plan. The company increased its annual dividend by 33% to 16 cents per share for 2024 and plans to continue increasing it by at least 4 cents per share each year through 2026, subject to board approval. This strategy would bring the annual dividend to 24 cents per share by 2026, providing backers with an attractive income stream.

Cameco is actively managing its production capabilities to meet the anticipated increase in demand for uranium. Investments are being made to extend the mine life at Cigar Lake to 2036, and production is being increased at McArthur River and Key Lake to their licensed annual capacity of 25 million pounds. These initiatives are aimed at solidifying Cameco's position as a leading uranium producer.

While the prevailing sentiment surrounding Cameco is largely optimistic, a contrarian perspective is warranted. While nuclear energy is undoubtedly gaining traction, the pace of new reactor construction remains slow and faces significant hurdles. The $80 billion nuclear power pact, while promising, is still in its early stages and subject to political and economic uncertainties.

Furthermore, the market may already be pricing in much of the positive news surrounding Cameco. The stock has already enjoyed a substantial run-up, and any disappointment in the upcoming earnings release could trigger a significant correction.

The expected EPS of $0.28 per share for the current quarter, while positive, may not be enough to justify the current valuation, especially if revenue growth slows or if Westinghouse's performance lags expectations. In short, while Cameco is a solid company in a promising sector, the current price might reflect more hope than reality, leaving it vulnerable to a pullback.

Cameco Corporation is strategically positioned to benefit from the growing demand for nuclear energy. Its recent partnerships, acquisitions, and financial performance have fueled market optimism, driving the stock towards a potential doubling of its year-to-date performance.