BofA Securities is extremely bullish on the prospects for nuclear power and heralds an imminent bull market for uranium prices. This optimism is accompanied by surveys showing growing acceptance that nuclear power will be a significant contributor to decarbonization.
BofA’s Research Investment Committee (RIC) called their monthly research report The nuclear Necessity. The committee outlined two reasons for higher uranium prices in addition to decarbonization.
First, Russia’s invasion of the Ukraine underscored European nations’ dependence on Russian natural gas and increased the demand for national energy security.
Also, with 60 new reactors under construction and 100 more approved, BofA mining analyst Michael Widmer believes that uranium supply will lag demand. Subsequent shortages will push the commodity price higher by between 20 and 40 per cent in his estimation, in the relatively near future.
In the short term, the RIC sees the potential for sanctions on Russian uranium that would limit supply. Nuclear power will become more prevalent as that plays out.
Nuclear power is also becoming more popular. A recent Gallup poll found that 55 per cent of Americans support the construction of new reactors, the highest number in over a decade.
Saskatchewan’s Cameco Corp. (CCO-T) is listed by BofA as one of the stocks that will benefit most from the trend. The others are Constellation Energy Corp. (CEG-Q), Vistra Energy Corp.(VST-N), and BWX Technologies Inc. (BWXT-N). The report also mentions the Global X Uranium ETF (URA-A) for investors looking for a diversified vehicle. Domestically, there is the Sprott Physical Uranium Trust (U-UN-T).