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What are we looking for?

In early September, the spot price of uranium moved above the US$60 per pound mark, closing that month above US$70. That is the first time since 2011 that the price of uranium has exceeded US$60. The spot price is currently in the US$75 range. Macquarie’s has a 2025 fiscal year uranium price forecast of US$90 per pound. What are we seeing for valuations for stocks in this industry?

Why is the spot price rising?

The spot price of uranium started rising in earnest this year after the Russian invasion of Ukraine. Ukraine and other European countries depend on uranium from the Commonwealth of Independent States (CIS), which includes Russia, Kazakhstan and Uzbekistan. After the invasion, Europe quickly looked for new sources of uranium. As demand increased, prices rose, and the demand for longer-term contracts put pressure on inventories and caused physical funds to add to their holdings. Going forward, the World Nuclear Association (WNA) projects demand for uranium to rise to 130,000 tons by 2040, nearly double current demand.

The screen

We used StockCalc’s screener to select the top 10 listed uranium stocks by market capitalization on the TSX and TSX-V. We then used StockCalc’s valuation tools to calculate fundamental (or intrinsic) valuation for each stock to see if it is undervalued or overvalued compared with its price.

Overview of the techniques used:

  • Discounted cash flow (DCF value) is a valuation technique in which cash-flow projections are discounted back to the present to calculate value per share.
  • A price comparables (price comps) technique values the company on the basis of ratios from selected comparable companies.
  • An adjusted book value (ABV) is calculated by multiplying book value per share by its 10-year average price-to-book ratio.
  • If we have analyst coverage, we may look at the consensus target price.

More about StockCalc

StockCalc is a fundamental valuation platform with tools to calculate and report on value per share for thousands of public companies listed on major North American stock exchanges. StockCalc also contains numerous tools to understand what the stocks you are investing in are worth. Globe Unlimited subscribers can subscribe to StockCalc using the promo code “Globe30,” which offers a 30-day free trial and special pricing for the second month.

What we found

Evaluating uranium stocks

NameTickerMarket Cap ($ Mil)Recent Close ($)StockCalc Val ($)Diff (%)DCF Value($)Price Comps($)ABV ($)Analyst Target ($)1 Year Return(%)Dividend Yield(%)
Sprott Physical UraniumU-UN-T6113.224.6031.3627.5-39.9038.3117.1038.6747.50.0
NexGen EnergyNXE-T4313.58.269.3212.8-2.682.677.6411.1142.70.0
Denison MinesDML-T1894.12.172.16-
Energy FuelsEFR-T1253.910.9212.4914.4-9.4920.705.1017.3911.00.0
enCore EnergyEU-X686.44.536.3039.0-
Fission UraniumFCU-T670.70.911.5165.9-0.392.620.611.3026.40.0
F3 UraniumFUU-X141.60.310.348.8-0.120.650.170.00313.30.0


This industry comprises companies that are engaged in the production of uranium or the uranium royalties or investing business. Mines in 2021 supplied 77 per cent of the utilities’ annual requirements, with the balance made up from stockpiles around the world. Australia has the largest concentration of uranium reserves, followed by Kazakhstan, then Canada. Cameco Corp. is the only stock on this list paying a dividend, and nine of the 10 stocks are up over the past 12 months. When we ran this analysis one year ago, nine of the 10 stocks listed were down on the year.

Let’s look at a producer and an explorer:

Cameco CCO-T is one of the world’s largest uranium producers, and its stock price is up 90 per cent year-to-date as of Friday’s close. It has a very interesting uranium price sensitivity chart on its website. It currently targets a 40-per-cent fixed, 60-per-cent spot price mix in its revenue stream, which means any contracts previously established at a lower price would affect the average revenue per pound of uranium compound U3O8. For example, its expected realized uranium price for 2025, assuming a US$60 spot price, would be US$54, and if spot prices climb to US$120, it would realize US$65 due to those prior contracts. In September, Cameco announced reduced production at both its Cigar Lake and Key Lake mines, down three million tonnes to 34 million tonnes of U3O8 for 2023. Our models for CCO-T are both above and below the current price and the analyst target and weighted valuation above.

Fission Uranium FCU-T is an exploration stage company. They recently raised $9.2-million in flow-through shares for continued exploration of the Triple R deposit on their PLS (Patterson Lake South) property in the Athabasca Basin region. (A flow-through share is a type of common share that permits the initial purchaser to claim a tax deduction equal to the amount invested.) Our models for FCU are above and below the current price and we see analyst targets and weighted valuation above.

You can see in the accompanying table the percentage difference between each stock’s recent closing price and its intrinsic value. The StockCalc Valuation column is a weighted calculation derived from the models and analyst target data if used.

Investing involves risk. StockCalc accepts no liability whatsoever for any loss or damage arising from the use of this analysis.

Brian Donovan, CBV, is the president of StockCalc, a Canadian fintech based in Miramichi, N.B.

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