Posted 3/18/2024, 10:09:16 PM
Cameco Stock Drops as Uranium Rally Cools Off
- Uranium prices surged in 2023 but have since corrected, calling into question the fundamentals behind the rally
- Cameco stock has declined 16% from its 2022 highs as uranium prices pull back, indicating the market may have peaked
- Uranium supply is far more elastic than demand, so prices could fall further as more production comes online to meet demand
- With declining prices, Cameco's earnings will be limited due to its long-term contracts signed at lower prices
- Cameco remains overvalued trading at 42X earnings, though sentiment could drive the stock higher in the near term