BofA raised its benchmark on shares of the West's largest uranium producer

Shares of North American Cameco, the world's second-largest uranium ore producer after Kazakhstan's Kazatomprom, have significant upside potential following the announcement of an $80 billion deal with the U.S. government, according to Bank of America. The bank expects President Donald Trump's policies to favor the company in the coming years.

BofA raised its target price on Cameco shares from $95 to $130 with a "Buy" recommendation. The new benchmark is 22% above the closing level in New York on October 29. The bank improved its outlook after Cameco, along with partners Brookfield Asset Management and Westinghouse Electric Company , agreed with the U.S. Department of Commerce to build nuclear reactors in the country worth at least $80 billion.

"We view this only as a starting point," CNBC quoted BofA analyst Lawson Winder as saying in a note to clients. - The higher multiples reflect a significant improvement in growth prospects due to Cameco's 49 percent stake in WEC and are only slightly short of historical highs."

According to a BofA analyst, Trump's executive orders in support of U.S. nuclear power have created a strong upside for Cameco stock over the next few years. Winder cited other factors in the company's favor:

- risks of disruptions in uranium mine operations, which could lead to a shortage of supply and an increase in prices for this asset;

- accelerating the pace of construction of new reactors in countries that will be key consumers in the future (China, Japan and India);

- tightening restrictions on CO2 emissions, which will increase the attractiveness of nuclear power as an environmentally friendly basic energy source.

Following Cameco's announcement of its partnership with the U.S. government, Raymond James Financial raised its target price on the company's stock from $130 to $150, while Stifel raised its target price on the company's stock from CAD150 to CAD165 (from $107 to $118). Both investment banks recommend these securities to buy - with Outperform and Buy ratings, respectively.

Cameco's Xi lies in operating in the Canadian market, diversification through a stake in Westinghouse, and growth prospects through mine restarts and increased uranium demand in the West, Kazakhstan-based Teniz Capital Investment Banking noted in May.

This article was AI-translated and verified by a human editor