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Cameco (CCJ) Soars 7.9%: Is Further Upside Left in the Stock?

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Cameco (CCJ - Free Report) shares rallied 7.9% in the last trading session to close at $55.78. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 28.3% gain over the past four weeks.

Cameco shares surged on the news that Amazon Web Services, the cloud computing arm of Amazon (AMZN), has signed three new agreements to support the development of nuclear energy projects, including enabling the construction of several new Small Modular Reactors (SMRs).

This resurgence in demand for nuclear energy bodes well for Cameco. Last month, Constellation Energy signed a long-term power supply agreement with Microsoft Corporation. To meet Microsoft’s 20-year clean energy requirements, Constellation Energy will restart the nuclear-powered Three Mile Island Unit 1, which was idle for five years for economic reasons. Oracle is designing a data center powered by three small modular reactors.

This uranium producer is expected to post quarterly earnings of $0.28 per share in its upcoming report, which represents a year-over-year change of +16.7%. Revenues are expected to be $532.06 million, up 24.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Cameco, the consensus EPS estimate for the quarter has been revised 40% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CCJ going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Cameco is part of the Zacks Mining - Miscellaneous industry. Alpha Metallurgical (AMR - Free Report) , another stock in the same industry, closed the last trading session 1.4% higher at $223.55. AMR has returned 7.2% in the past month.

For Alpha Metallurgical, the consensus EPS estimate for the upcoming report has changed -43.1% over the past month to $2.01. This represents a change of -69.8% from what the company reported a year ago. Alpha Metallurgical currently has a Zacks Rank of #5 (Strong Sell).


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