Recently, the U.S. imposition of tariffs on global trade partners has sparked concerns about an economic recession, leading to a sharp decline in the S&P/TSX Composite Index. However, Canadian uranium giant Cameco (TSX: CCO) has demonstrated remarkable resilience. Below is an explanation of why the current moment presents an opportune time to buy Cameco stock at a low and hold it long-term in a Tax-Free Savings Account (TFSA).
Despite market volatility, Cameco achieved record performance in 2024: revenue grew by 21% to CAD 3.1 billion, while adjusted EBITDA surged by 73% to CAD 1.5 billion. The Key Lake facility produced 20.3 million pounds of uranium annually, ranking first globally. Meanwhile, the global uranium supply is facing a severe shortage, further highlighting Cameco’s operational advantages.
Year-to-date, Cameco’s stock price has retreated by 28%, with a forward P/E ratio of 24x. Considering its earnings growth prospects, the valuation is within a reasonable range. The uranium industry operates independently of economic cycles. Cameco’s long-term supply contracts lock in stable demand, with projected annual supply reaching 28 million pounds by 2029. Nuclear power plants, as baseload power sources for national grids, have highly inelastic fuel demand, unaffected by short-term economic fluctuations.
Unlike many exporters, Cameco passes tariff costs to buyers through contractual terms. CEO Tim Gitzel explicitly stated, “Our contracts clearly specify tariff-related tax clauses.” This means that even if Canadian uranium faces additional tariffs, it would have “no material impact” on Cameco.
Meanwhile, the global nuclear renaissance is accelerating: multiple countries are extending the lifespans of nuclear plants and launching new projects. Cameco noted in its report, “Current nuclear fuel fundamentals are the most favorable in decades.”
The tax advantages of a TFSA make it an ideal vehicle for investments with strong growth potential. While Cameco’s stock price has corrected alongside the broader market, its fundamentals continue to strengthen, revealing long-term value. Cameco’s investment in Westinghouse has already contributed to EBITDA growth, and its technical framework agreement with South Korean partners further expands growth opportunities.
Amid the reshaping of global trade dynamics, regardless of economic conditions, Cameco—with its industry-leading position—stands out as an ideal choice for TFSA portfolios.
