It’s been a sad week for Cameco Corporation (TSE:CCO), who’ve watched their investment drop 10% to CA$59.27 in the week since the company reported its annual result. It was a credible result overall, with revenues of CA$2.6b and statutory earnings per share of CA$0.83 both in line with analyst estimates, showing that Cameco is executing in line with expectations. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Cameco
Taking into account the latest results, the current consensus from Cameco’s seven analysts is for revenues of CA$3.03b in 2024. This would reflect a solid 17% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 40% to CA$1.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$2.94b and earnings per share (EPS) of CA$2.05 in 2024. So it’s pretty clear the analysts have mixed opinions on Cameco after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.
There’s been no major changes to the price target of CA$72.87, suggesting that the impact of higher forecast revenue and lower earnings won’t result in a meaningful change to the business’ valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Cameco at CA$80.00 per share, while the most bearish prices it at CA$65.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It’s clear from the latest estimates that Cameco’s rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.3% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Cameco is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cameco. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple Cameco analysts – going out to 2026, and you can see them free on our platform here.
You can also view our analysis of Cameco’s balance sheet, and whether we think Cameco is carrying too much debt, for free on our platform here.
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Find out whether Cameco is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
