• BofA Securities raises its 2027 uranium price forecast to $130/lb, implying roughly 52% upside from current spot levels.
  • The bank's bullish stance is underpinned by tightening supply, shrinking utility contract coverage (48% vs. 56% last year), and accelerating nuclear investment.
  • While maintaining a Buy on Cameco (CCJ), BofA trimmed its price target to $133, reflecting higher 2026 cost guidance.

Supply Squeeze and Utility Under-Coverage

Uranium prices are poised to extend their rally, according to BofA Securities, which lifted its 2027 forecast to $130 per pound. That implies significant upside from today's spot prices, driven by a market that is increasingly tight. One key metric: utility contract coverage has fallen to 48%, down from 56% a year ago, signaling that utilities are under-contracted and will need to secure supply in a competitive market.

The supply-demand balance is further strained by a lack of new mine supply and a growing appetite for nuclear energy. The U.S. has announced ambitious plans to expand nuclear capacity to 400 gigawatts by 2050, including the construction of 10 new AP1000 reactors and a $2.7 billion investment in domestic enrichment. These initiatives underscore a structural shift toward nuclear power as a clean energy source, which should keep demand for uranium robust.

Cameco: A Top Pick with a Slightly Trimmed Target

BofA continues to rate Cameco as a Buy, but cut its price target by 5% to $133. The reduction follows the company's guidance for higher costs in 2026, which slightly tempers the upbeat outlook. However, BofA's analysts argue that Cameco's leading position in uranium production and its exposure to rising prices make it a prime beneficiary of the market's upward trajectory.

"We remain constructive on uranium equities, with Cameco well-positioned to capitalize on the supply deficit," a BofA analyst said in a note. "The cost adjustments for 2026 are a minor hiccup in an otherwise bullish narrative."

Broader Implications

The U.S. push for nuclear energy is part of a global trend, with countries like Japan and several European nations revisiting nuclear power to meet decarbonization goals. This, coupled with a lack of investment in new mines over the past decade, is tightening the market. As utilities race to secure long-term supply, spot prices are likely to remain elevated, potentially reaching the levels BofA projects.

Investors are taking note, with uranium miners and related ETFs rallying in recent months. However, some caution is warranted, as higher cost guidance from producers could squeeze margins, and any delays in reactor projects could temper demand growth. Still, BofA's revised forecast suggests the bull case for uranium remains intact.

This article was updated to reflect BofA's revised price target for Cameco.