* Uranium stocks hardest hit, Cameco down over 14 pct
* Germany put nuclear plants on hold, Italy pushes forward
* Utility shares fall, nuclear reactor builders down
By Julie Gordon and Lynn Adler
TORONTO/NEW YORK, March 14 Investors hammered
companies that build nuclear reactors and supply them with fuel
on Monday as Japan struggled to avert a meltdown at a stricken
reactor, on fear that the whole sector could be in for a
downturn, in the short and medium term at least.
But analysts said the industry could recover from the stock
market setback as negative perceptions fade, and the current
price slump might be a buying opportunity.
"Meltdown is a very big word in people's minds, so I think
that the public sentiment is probably going to swing against
nuclear power," said BMO Capital Markets analyst Edward Sterck.
"But I don't think this is the end of the nuclear industry."
"With the hype that some commentators are making that this
is the end of the nuclear energy, I think we're going to
possibly see an overreaction in the stock prices. At some point
there will be value there."
Japan's crisis, already the worst nuclear accident since
the 1986 Chernobyl disaster, hit shares of industry giants like
General Electric (GE.N) and Hitachi (6501.T), along with
uranium producers Cameco (CCO.TO) and Areva CEPFi.PA, and
power utilities like Entergy (ETR.N) and Exelon Corp (EXC.N).
The Japanese reactors were designed to withstand
earthquakes, but Friday's quake was a record for Japan, and a
devastating tsunami knocked out backup power, causing and
deepening the problems.
With the 24-hour news agenda focused on the possibility of
a meltdown at one or more reactors in Japan, analysts said the
market will need time to recover from losses.
"We need to see those reactors brought under control before
people start to review the situation with a little more
perspective," Sterck said.
Nuclear power accounted for about a third Japan's of energy
generation before the quake, and the damage has raised concerns
about future of the industry there.
The country has shut 11 of its 54 reactors since the quake,
reactors that Dahlman Rose analyst Anthony Young said consume
about 340,000 pounds of uranium a month.
The facilities in Japan, while over 40 years old, are
designed very differently from the Chernobyl reactor, with
additional containment vessels to prevent a lethal explosion.
On Monday, in response to public pressure against nuclear
development, some European countries announced delays or
changes to their nuclear energy plans. [ID:nLDE72D1YE]
Analysts said countries with contracts in place to build
new reactors would face expensive break fees if plans were
canceled, and future energy plans for numerous nations are
dependent on the addition of nuclear power.
"We remain extremely optimistic on the outlook for uranium
and nuclear fuel generation," Young said in a note. "We believe
the reactor buildout that is occurring in China, India and
Russia will continue."
Uranium miners were the four most active stocks on the
Toronto Stock Exchange by volume on Monday .AV.TO..
Shares of Cameco, the world's second largest uranium miner,
were down 14 percent at C$31.29, while Uranium One UUU.TO,
Canada's second largest producer, was down 27 percent at
TD analyst Greg Barnes said Cameco sells 10 to 15 percent
of its uranium to Japan. If, in what he said was a worst case
scenario, Cameco lost 10 percent of sales, it would translate
to a 21 percent drop in earnings per share. [ID:nN14135943]
Shares of utilities that use nuclear power also fell.
Entergy dropped 4.7 percent to $70.20, Exelon fell 1.2 percent
to $42.62, and Southern Co (SO.N) was down 1.46 percent at
General Electric, which manufactures nuclear power plant
equipment, declined 3 percent to $19.74, while its Japanese
partner Hitachi fell 16.19 percent on Monday.
(Additional reporting by Steve James and Euan Rocha; editing
by Janet Guttsman)