Tenge as a risk factor: why shares of the largest uranium producer are getting cheaper

Shares of Kazatomprom, the world's largest uranium producer, lost about 20% of their value on the London Stock Exchange (LSE) during the week. Quotes of the company began to fall on Ma 6 from $90 per share (at the peak) and at the time of publication fell to $70.5. The shares showed the biggest fall on May 12, having dropped by 8.27% during the day.

The main competitors on the world markets suffered less: shares of Canadian Cameco fell by 1.88% between May 6 and 13. Paladin Energy - by 7.07%, shares of Energy Fuels - by 6.01%.

On Ma 8, JP Morgan in a research note (available at Oninvest's disposal) revised its recommendation on Kazatomprom shares from "buy" to "neutral" and placed them on the "watch list for possible negative catalysts" until the publication of the results of the first half of 2026. Investment bank experts explain that despite the ongoing "global nuclear energy renaissance" and rising uranium prices, the company is facing inflationary pressures due to rising oil, transportation and consumables prices, as well as sulfuric acid, which accounted for up to 15% of the company's costs in 2025. Most of Kazatomprom's costs are denominated in tenge, which has strengthened by about 10% since the beginning of the year to 463 per dollar. At the same time, the profit forecast includes a rate of 540.

An additional negative factor was the increase in the mineral extraction tax, which in Kazakhstan increased from 9% to 12-14% (depending on production volumes and uranium prices).

"After rising more than 50% YTD, Kazatomprom shares are trading at EV/EBITDA multiples for 2026-2027 of 12.3x and 9.9x, respectively, while their long-term average is closer to 7," JPMorgan said in a report. Following the model update, Kazatomprom's 2026-2028 EBIT/net income forecasts, mainly due to currency effects, have declined by an average of 10-15%. At the same time, the investment bank raised its target share price for December 2027 to $90 vs. $83 earlier. Analysts explain this by the company's growth potential due to geological exploration after 2035.

The strengthening of the tenge is somewhat of a problem because the company sells uranium in dollars and its costs are denominated in tenge, said Daniyar Orazbayev, an analyst at Freedom Finance Global. However, he believes this may be partially offset by lower capital expenditures, since machinery and equipment are most often imported, he said.

"Kazatomprom provides about 40% of the world's uranium production. All of the company's deposits are located in Kazakhstan. Kazatomprom shares are traded on Astana International Exchange and London Stock Exchange. About 75% of the company is controlled by the state, the remaining 25% of shares are in free float.

In early April, Bank of America included Kazatomprom shares in the list of "10 emerging market stocks for 2026" with a target price of $100. Experts focused on the growth of uranium price to $135 per pound by the end of the year due to demand from China. However, the price has remained in the range of $83-87 per pound for the last three months.

Other investment banks assessed Kazatomprom's prospects more conservatively: Canaccord Genuity in March retained a "buy" recommendation for the securities, but reduced the target price from $98 to $95.

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