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Research Alert: CFRA Maintains Hold Opinion On Shares Of Cameco Corporation

05/10/2021 02:10

06:05 AM EDT, 05/10/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We further raise our target price on Cameco Corporation to C$22 from C$18 previously. The valuation reflects 2022 EV/EBITDA of 34.5x, which is substantially higher than 8.3x commanded by its closest comparable peer, Kazatomprom, justified in our view by its lower sovereign risk and better cash flow stability. While Cameco turned to an adjusted net loss of C$29 million (LPS of C$0.07) in Q1 2021, the result was better than consensus estimate for a loss of C$38 million (LPS of C$0.10). We believe the outperformance could be explained by the reversal of C$27 million in legal costs relating to the dispute with Canada Revenue Agency. We expect the restart of production at the Cigar Lake mine to result in improved profitability from Q2 2021 onwards. However, we think Cameco's share price has run up ahead of industry fundamentals. Given the absence of material recovery in uranium end demand and prices, we prefer to stay on the sidelines.