May 13, 2009 / 3:22 PM / 10 years ago

RESEARCH ALERT-UPDATE 1-BMO starts Cameco with outperform

May 13 (Reuters) - BMO Capital Markets initiated coverage of Cameco (CCO.TO) with an “outperform” rating, saying the uranium producer is well placed to take advantage of opportunities in an expanding nuclear industry.

“Cameco is well placed to capitalise on forecast growth in the nuclear industry with a strong balance sheet and an estimated C$1,300 million in available liquidity,” analyst Edward Sterck wrote in a note to clients.

The brokerage which has a price target of C$35 on the company’s stock, expects Cameco to provide solid earnings growth, with a 32 percent increase expected by 2010.

“Near-term uranium production is forecast to grow with the ramp-up in production from Inkai and speculative growth from a prospective expansion at McArthur River and the remediation of Cigar Lake,” Sterck added.

Sterck expects the company to consistently sell almost double the amount of uranium produced by Energy Resources of Australia Ltd (ERA.AX) and by Paladin Energy Ltd PDN.TO from 2013 onwards.

The brokerage downgraded Paladin Energy to “market perform” from “outperform.”

Shares of Cameco were trading down about a percent at $29.48 Wednesday on the Toronto Stock Exchange. (Reporting by Mansi Dutta in Bangalore; Editing by Jarshad Kakkrakandy)

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