Desjardins Remains Cautious On Cameco Due To Uranium Market

Desjardins Securities analyst John Redstone is maintaining his “hold” rating on the world’s biggest uranium producer Cameco Corp. (CCJ), despite stronger than expected second quarter earnings, because of concerns that the spot market for nuclear fuel is over heated.

“We expect the uranium price to return to the US$45/lb level over the next two years as the market returns to balance,” Mr. Redstone said in a note.

The price of partly refined uranium ore known as yellowcake soared to a record US$138 a pound last month, about triple what it was trading at a year ago. The rise is being driven by expectations of a surge in demand for uranium as the nuclear power generation industry undergoes an expansion.

Mr. Redstone maintained his 2008 earnings estimate for Cameco of C$1.71 a share and his 12-month price target of C$34 a share.

CCJ 1-yr chart:

Comments

[dcappe10]

The Uranium market has been troubled with delays and shortages for some time now, but the price for Uranium has continued to crease from 2003, without one drop in Price. I found a report that gives a great overview of the market and the future for this commodity.

www.dailyreckoning.com...

-Cheers!