Key Takeaways:
Cameco shares jumped 7 percent after Q2 revenue of CAD 814 million beat estimates, even as adjusted EPS fell 75 percent to 13 cents on lower uranium volumes.
"Westinghouse has a pipeline of 91 potential AP1000 reactor opportunities globally," CEO Tim Gitzel said, noting the company was "extremely limited" in what it could disclose about the IPO under SEC rules.
Uranium production fell 15 percent to 3.9 million pounds, with Cigar Lake output down 43 percent to 1.6 million pounds following a scheduled maintenance outage. Sales volumes dropped 18 percent to 7.1 million pounds, though the average realized price rose 15 percent to CAD 93.13 per pound. Adjusted EBITDA declined 42 percent to CAD 391 million.
The Westinghouse IPO filing, submitted confidentially to the SEC, could unlock shareholder value from the nuclear technology business that Cameco owns 49 percent with Brookfield Renewable Partners. Cameco maintained 2026 uranium production guidance of 19.5-21.5 million pounds, but total revenue guidance of CAD 3.32-3.57 billion implies about a 1 percent decline from 2025.
Uranium revenues fell 7 percent to CAD 659 million as the 18 percent decline in sales volumes offset a 15 percent increase in realized prices. Fuel Services revenues dropped 6 percent to CAD 152 million, with sales volumes down 18 percent to 3.6 million kgU. Total cost of sales inched up 1 percent to about CAD 624 million.
The company's forward price-to-sales ratio of 15.97 compares with the industry's 4.99, and its Value Score of F points to a stretched valuation. Peers Ur-Energy and Energy Fuels trade at 4.70 and 16.20, respectively. Cameco's six-month stock decline of 21.9 percent compares with the industry's 3.2 percent dip.
Westinghouse supports more than half of the world's operating nuclear reactor fleet, with six AP1000 reactors operating, 14 under construction and another five under contract. The U.S. Department of Energy in June announced a conditional commitment of up to $17.5 billion for long-lead components for up to 10 new AP1000 reactors. Dominic Kieran, chair of Westinghouse's board, said the pipeline is ordered by proximity to final investment decisions.
Cameco has long-term obligations to deliver an average 28 million pounds of uranium annually over the next five years, providing revenue visibility. The company's production capacity accounts for nearly 15 percent of global output, and it recently increased its ownership interest in Cigar Lake to 57.418 percent.
The consensus estimate for 2026 earnings implies 27.2 percent year-over-year growth, while 2027 estimates point to 55.8 percent growth. The Westinghouse IPO, if completed, could provide another avenue for shareholder value. Investors will watch for the registration statement's valuation details and the number of shares Brookfield and Cameco plan to sell.
This article is for informational purposes only and does not constitute investment advice.
