credit suisee - bullish on uranium

Bullish on uranium, Credit Suisse upgrades targets for Cameco (T.CCO), Denison (T.DML)
Stockhouse Editorial
2 hours ago


The following is an excerpt from Canaccord Genuity’s Morning Coffee newsletter.

Credit Suisse has increased its target price on Cameco Corp. (TSX: T.CCO, Stock Forum)shares, and upgrading its rating and increased its rating and increased its target price on Denison Mines Inc. (TSX: T.DML, Stock Forum).

The DML upgrade is mainly driven by an increase in Credit Suisse’s in-situ valuation for DML’s reserves and resources, reflecting greater exploration upside at Wheeler River (to 110 million pounds from 90 million pounds) and among its recently acquired asset portfolio, as well as improved sentiment within the uranium sector.

The brokerage highlighted that it has undertaken a comprehensive supply-side review following announced project deferrals and together with unforeseen production issues – estimates 70 million pounds of mine supply (cumulative) has been removed from the market over the next five years (or 5% of total cumulative demand) .

A positive uranium price has been absent from supply dynamics. Credit Suisse views the downside risk in uranium prices as limited, and the prospects for a rising price profile over the next three to five years coinciding with large market deficits beginning in 2020 continue to look promising.

In the brokerage’s view, positive uranium price momentum and sentiment will be driven by the following factors over the next 12 months:

Clarity surrounding the pace of reactor restarts in Japan.

Resumption of approvals for new nuclear reactors in China.

Clarity over Russian supplies post expiry of the HEU supply agreement and the potential impact of economic/trade sanctions; and increased supply discipline at uranium spot prices below the marginal cost of mine production.

Cameco was off 0.42% to $26.38 on Wednesday, while Denison eased 2.3% to $1.73.

Read more at http://www.stockhouse.com/news/natural-resources/2014/04/02/bullish-on-uranium-credit-suisse-upgrades-targets-for-cameco-t-cco-denison-t-dml#m7ydPVRWifFy7vgp.99