These 3 Nuclear Stocks Should Be on Your Energy Radar

Nuclear energy stocks have been on a tear again after U.S. President Donald Trump signed executive orders that will facilitate the expansion of nuclear energy production, including expediting the regulatory approvals for new nuclear reactors. The Trump administration intends to reform the nuclear energy sector by overhauling the Nuclear Regulatory Commission (NRC), allowing the DoE to build nuclear reactors on federally-owned land, enhancing research at the U.S. Department of Energy and expanding domestic uranium mining and enrichment.

And, Big Tech companies are seizing this opportunity to secure cheap, abundant power supplies for their power-hungry AI data centers. Shares of America’s leading nuclear power plant operator, Constellation Energy Corp. (NYSE:CEG), have surged more than 15% after the company unveiled on Tuesday an agreement to sell more than 1,100 MW of nuclear power to Meta Platforms (NASDAQ:META) from its Illinois nuclear plant for 20 years. 

According to The Wall Street Journal, the deal is the first deal of its kindfor an operating nuclear plant in the United States, and closely mirrors a similar deal Constellation signed with Microsoft Corp. (NASDAQ:MSFT) last year. The Microsoft deal is a 20-year power purchase agreement  (PPA) that will see Constellation Energy restart its undamaged reactor in Three Mile Island, which was undergoing decommissioning. 

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Neither deal will draw power from the main grid. However, Meta appears to have secured a better deal, with Citi’s Ryan Levine estimating that the 20-year PPA is priced in the $70-$95/MWh range, considerably cheaper than  Jefferies’ estimate of at least $110/MWh for Microsoft’s PPA, because Meta’s deal “…does not offer a substantial premium for low-carbon nuclear power”. Levine has projected that ~70% of Constellation’s existing nuclear plants could secure comparable datacenter deals at ~$80/MWh.

Constellation is unlikely to be the only nuclear power producer that will see surging power demand under a Trump administration that refuses to put a premium on low-carbon energy. Nuclear stocks have mostly taken a breather after a scorching rally triggered by Russia’s war in Ukraine. However, here are 3 nuclear stocks with significant upside.

Denison Mines Corp.

Consensus Price Target: $4.04

Implied 12- Month Upside Potential: 148%

Denison Mines Corp.(NYSE:DNN) engages in the exploration, acquisition and development of uranium properties in Canada. Denison has become a Wall Street favorite, with BMO analyst Alexander Pearce saying the stock’s price-to-net present value ratio of 0.9x is one of the most attractive in its group, with clear near-term catalysts. Denison boasts one of the sector’s strongest balance sheets, critical for funding modest capital requirements for its 2.2M lbs Phoenix In-Situ Uranium Recovery project.

Last month, Denison reported Q1 2024 revenue of C$1.38M, good for +66.3% Y/Y growth while quarterly loss of $0.03 per share missed the Wall Street consensus by $0.01. The company achieved ~75% completion of total engineering for Phoenix, and has committed $67 million for long-lead capital purchases. 

NexGen Energy

Consensus Price Target: $12.85

Implied 12- Month Upside Potential: 102%

NexGen Energy Ltd. (NYSE:NXE), is a Canadian exploration and development stage company that develops uranium properties in Canada. The company  holds a 100% interest in the Rook I project in southwestern Athabasca Basin of Saskatchewan, totaling an area of ~35,065 hectares. Back in March, NXE shares surged after the company revealed that recent drilling at its Rook I site intersected a rich uranium concentration at its Patterson Corridor East property, the largest development-stage uranium deposit in Canada. According to the company, drillhole RK-25-232 unveiled rich uranium concentration, making it one of the shallowest high-grade intersections at Patterson Corridor.

“Discovering mineralization of this intensity so early in our 2025 program outpaces the success pattern experienced at the Arrow deposit,” CEO Leigh Curyer said.

Paladin Energy

Consensus Price Target: $5.08

Implied 12-Month Upside Potential: 21.5%

Paladin Energy Ltd (ASX:PDN TSX: PDN OTCQX:PALAF) is an independent uranium developer with a 75% stake in Namibia’s Langer Heinrich Mine. Last year, Paladin acquired Canada’s Fission Uranium Corp., with the company now operating an extensive portfolio of uranium assets across Canada. Paladin is positioning itself as a significant player in baseload energy provision in multiple countries across the globe and contributing to global decarbonization.

Last month, Paladin reported Q3 revenue of $60.97M and GAAP EPS of $0.06. Uranium sales for the quarter were 872,000 pounds, at an average price of $69.90 per pound. The Langer Heinrich property produced 745,000 pounds of uranium, good for a 17% increase on the previous quarter’s production to bring total production to over 2 million pounds in the financial year-to-date.

By Alex Kimani for Oilprice.com

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