Should You Buy Cameco While It's Below $100?

Cameco, a leading North American uranium miner, owns a 49% stake in Westinghouse (acquired late 2023) and reported that its share of Westinghouse adjusted EBITDA rose 78% year-over-year to $569 million in the first nine months of 2025. The company stands to benefit from a U.S. government–Brookfield–Westinghouse–Cameco partnership to build at least $80 billion of new reactors, with the U.S. entitled to 20% of Westinghouse cash distributions above a $17.5 billion threshold. Cameco’s shares trade at roughly 92x this year’s projected earnings and 65x next year’s, while analysts forecast EPS growth of ~47% in 2026 and ~33% in 2027, creating upside from both uranium price moves and Westinghouse service/ construction revenues.

Analysis

Market structure: Winners are vertically integrated players — CCJ (uranium + 49% Westinghouse) and BAM — plus large reactor OEMs and U.S. domestic conversion/enrichment contractors; losers include Russian HALEU exporters, marginal junior uranium miners, and some fossil baseload generators facing longer-term demand erosion. The Westinghouse–U.S. partnership ($80B build signal) shifts pricing power toward integrated suppliers who can secure long‑term fuel offtakes and construction margins; expect contracting and long‑dated uranium offtakes to re-price, not the spot market overnight.

Risk assessment: Tail risks include major permitting delays, a high‑profile accident or political reversal that pauses builds, or HALEU supply bottlenecks causing short‑term fuel spikes; any of these could move CCJ ±30–50% within 12 months. Immediate (days) effects are volatility and option gamma; short term (3–12 months) depends on Westinghouse contract announcements and Q4/Q1 earnings; long term (2–7 years) is realization of reactor fleet additions and sustained uranium demand growth.

Trade implications: Primary trade is selective long CCJ to capture integrated upside with size limits (2–4% portfolio) and paired protection; complementary tactical long BAM (1–2%) for balance‑sheet/contract upside. Use options to cap downside: buy 12–18 month CCJ call spreads (e.g., buy 90C/sell 150C) sized to 1–1.5% notional and sell short exposure to broad uranium ETF (URA) as a relative‑value hedge on rallies >20%.

Contrarian angles: Consensus underestimates execution risk at Westinghouse and the government profit‑share cap (first $17.5B), which compresses Cameco’s effective upside until distributions clear that threshold; valuation is rich (~65–92x forward EPS) so upside requires delivery. Historical parallel: 2006 uranium cycle showed large supply response and price mean reversion after speculative rallies — don’t assume linear upside without concrete long‑term offtakes and HALEU supply solutions.

Key Decisions for Investors

• Establish a 2–3% long position in Cameco (CCJ) within 0–30 days; scale to 4% only on pullbacks to ~$75; target exit at $130–$150 (≈30–60% upside) within 12–24 months or trim if CCJ appreciates >40% without equivalent spot U3O8 strength; hard stop-loss at −20% from entry.
• Purchase an 18‑month CCJ call spread (buy 90C / sell 150C) sized to 1–1.5% of portfolio to lever upside while limiting downside; roll or monetize on a 30–40% underlying move or after key Westinghouse permitting milestones within 6–12 months.
• Take a 1–2% long position in Brookfield Asset Management (BAM) to capture Westinghouse construction/service upside; if BAM rises >25% within 12 months, consider selling 6–12 month covered calls to harvest premium.
• Establish a 1% tactical short/hedge in the Global X Uranium ETF (URA) on a rally >20% from current levels or if CCJ outperforms spot uranium by >15% over 60 days — use this to protect against a speculative uranium ETF unwind.
• Monitor three specific catalysts over the next 90 days before adding aggressive size: (1) U.S. NRC permitting and project‑by‑project contract awards from Westinghouse, (2) quarterly Westinghouse EBITDA flows (Cameco share) trending above +50% YoY, and (3) spot uranium moves ±25% — add/notch exposure only when two of three align.