Cameco Corporation produces and sells uranium worldwide. The company operates through Uranium, Fuel Services, and NUKEM segments. The company was founded in 1987 and is based in Saskatoon, Canada.
CCJ Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Cameco Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Cameco Corp ranked in the 99th percentile in terms of potential gain offered. Our DCF model suggests the stock is undervalued by 45572.33%; returns of such proportions should be viewed with some skepticism, though. The most interesting components of our discounted cash flow analysis for Cameco Corp ended up being:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 85. Its equity weight surpasses that of 70.76% of free cash flow generating stocks in the Basic Materials sector.
Its compound free cash flow growth rate, as measured over the past 5.06 years, is 2.52% -- higher than 96.25% of stocks in our DCF forecasting set.
Cameco Corp's effective tax rate, as measured by taxes paid relative to net income, is at 21 -- greater than 82.2% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Cameco Corp? See CMT, ZKIN, TMST, LPX, and CMC.
After a decade long bear market, the time to invest in uranium has finally arrived. The largest uranium miners, Cameco (CCJ) and Kazataprom, began cutting production in 2018, leading to market with a supply deficit as a new contracting cycle approached. Then COVID-19 happened, causing further cuts in supply and...
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Cameco (TSX:CCO)(NYSE:CCJ) could have attractive upside, as energy diversification needs potentially reshape the Canadian economy. The post Buy This 1 Rare TSX Stock for Huge Upside Potential appeared first on The Motley Fool Canada .