Stock of uranium miner Cameco is jumping Thursday after an analyst got more bullish .
Bank of Montreal analyst Alexander Pearce upgraded Cameco (ticker: CCJ) stock to Buy from Hold, and raised his price target to roughly $34 a share from $26.
Cameco stock is listed on both Canadian and U.S. exchanges. Pearce's target price given is in Canadian dollars. His Canadian dollar targets are $42 and $33, respectively. The U.S. dollar is worth roughly C$1.25 these days.
Cameco shares are up 5.7% in early trading Thursday. The S&P 500 and Dow Jones Industrial Average are down 0.3% and 0.5%, respectively.
Cameco makes fuel for nuclear-power reactors. It doesn't have a lot of comparable companies. "In a sector with a limited number of listed producers, Cameco's stock trades on sentiment more than most," wrote Pearce in his Thursday report. "Thus, with momentum for low-carbon nuclear generation continuing to build and security of supply an increasingly important factor for utilities/governments, we think Cameco's advantageous geographical production base, and its position as the largest and most [freely traded] uranium stock means there should be further upside to its stock price."
Momentum is building because of the Russian invasion of Ukraine, as Russia is a supplier of uranium. What's more, nuclear power is growing in importance as European government reconsider the security of power-generating assets fueled by Russian natural gas.
Since Russia invaded, Cameco stock has soared about 43%. Shares dipped briefly in early March after Russian munitions hit a Ukrainian power plant. It took about two trading days to more than recover that drop.
Cameco has become an increasingly popular stock on Wall Street in recent weeks. Today, more than 90% of analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target is up to about $30, just above where the stock is trading at on Wednesday.
Before the invasion, entering February, only 64% of analysts covering the company rate shares at Buy. The average analysts price target back then was about $28.