Results: CCJ and FSLR
Hi MM, Can we please have MM's updated views on CCJ and FSLR following their respective results released this week, including MM's intentions in relation to each stock (CCJ on MM's hitlist and FSLR held by MM)? Thanks, Darren
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Answer
Hi Darren,
We covered off on First Solar (FSLR US) in Fridays am note here, concluding; We like FSLR, particularly after its recent price action, and we’re targeting a move back up towards $US230. Their quarterly was a beat, and they maintained FY24 guidance.
Cameco (CCJ US): Reported 1Q24 results early in the week that were a miss from a financial perspective, blaming its Kazakhstan operations which were facing a shortage of materials. That implies that the market is tight for product, and that was the catalyst to send Uranium prices higher, along with the Uranium stocks during the week – Spot Uranium now back above $US92/lb.
In terms of their quarterly;
- adjusted EPS C$0.13 vs consensus estimate C$0.37
- Revenue C$634 million, -7.7% y/y, estimate C$792.9 million
- Uranium production 5.8 million lbs
- Uranium average realized price per lb C$77.33, +27% y/y, estimate C$77.44
They did say they were tracking well toward achieving the 2024 outlook, which was a positive and why the stocks held up.
We also got 1Q24 production from Kazatomprom. It appears to be mostly in-line with expectations – there are problems with the Unkai JV (already flagged by Cameco) but there is no change to the recently downgraded production guidance.
The issue with both Cameco & Kazatomprom to a lesser degree, and why we are a little up in the air about pressing the buy button right now, is that contracts that were signed in periods of lower prices are limiting their exposure to rising uranium prices. As a result, they are not experiencing the same benefits as other Uranium companies.
- We like Uranium and Uranium stocks, and we’re starting to get the feeling that being too cute around trading may be counter productive given our medium term bullish view.
