Cameco Stock After Q3 2026 Earnings: The Uranium Upside It Already Sold

The 9% drop in Cameco's shares on October 30 came with an adjusted loss for the quarter, which Cameco put down to a planned, longer-than-usual maintenance shutdown at its Key Lake mill, which cut production 20% and pushed up costs. I think the outage is the least important thing in the report. The number that matters is in Cameco's own price table, and it says the company has already sold most of the next three years of the uranium bull market to its customers.

Uranium ended September at US$89.63 a pound on the spot market. The long-term price, which is what utilities pay in deals signed today for delivery years out, was US$96.50, which Cameco's quarterly report calls close to its highest since 2011. Cameco sold its pounds for an average of US$65.78. That gap is the long-term contract book working as designed, and the contract book is what keeps utilities coming back to Cameco.

A lag is normal. Cameco's contracts reference prices set months or years earlier, so its price always trails a rising market. What's new is how long the lag runs. Each quarter Cameco publishes a sensitivity table showing what it expects to realize per pound under different spot prices, holding today's contracts as they are. Even if spot hit US$100 and stayed there, the table says Cameco would realize about US$73 in 2027 and US$80 in 2028. It doesn't get close to the market price until 2029 and 2030.

The outage hurt the quarter in a different way. Cameco has to deliver 29.5 to 30.5 million pounds this year but now expects to produce only 19.5 to 20.5 million. It fills the rest with about 8 million pounds of committed purchases, up to 3 million more from the market, and borrowed pounds. In Q3 that was still cheap: purchases cost C$83.78 a pound (Cameco reports costs in Canadian dollars), below the C$91.76 its contracts paid. But its cost guidance assumes about C$110 a pound for its remaining purchases, so that squeeze is still ahead.

A long-term uranium contract is insurance for both sides. The utility gets pounds it can count on at a price it can budget. Cameco gets a floor if the market falls. In a falling market, Cameco's shareholders collect on the policy. In a rising market, the utility does. Cameco's table shows both: at US$40 spot it would still realize US$47 in 2027, and at US$160 only US$77.

So I don't read the gap as a moat problem. The moat earns shareholders money only when Cameco reprices its book, and the place to see that is the 2029 and 2030 rows of the table, where new contracts land. At a US$100 spot price, the 2029 figure was US$85 at March 31, June 30 and September 30. Over those six months the long-term price rose from US$91.50 to US$96.50. The higher columns didn't move up either: at US$140 spot, 2029 went from US$95 to US$96 and back to US$94.

Cameco says that as the market improves it expects "to continue layering in volumes that capture greater future upside using market-related pricing mechanisms," meaning contracts whose price floats with the market. I believe it, but the table doesn't show it yet. Industry long-term contracting was about 42 million pounds in the first nine months, slightly behind last year, so utilities aren't rushing to sign either.

The uranium names split on this. Contracted sellers trail the price, and unhedged ones carry it. Kazatomprom is the biggest producer, and in August it was realizing a price similar to Cameco's. NexGen and Uranium Energy have little or nothing contracted, so their shares carry the uranium price almost directly, but they don't have Cameco's production behind them. Centrus sells enrichment under long contracts to 2040, the same insurance trade one step down the fuel chain. Q3 is the first quarter where Cameco's guidance prices pounds it must buy above what its contracts pay.

The strongest case against me is that I'm looking at the wrong half of Cameco. Its 49% share of Westinghouse produced C$143 million of adjusted EBITDA in Q3, up from C$124 million a year earlier, and it held full-year guidance for its share at US$370 to 430 million. In September, the US and South Korea announced a non-binding framework for Korea to invest up to US$120 billion in up to eight new US reactors, six of them Westinghouse AP1000s, and the US Nuclear Regulatory Commission renewed the AP1000 design certification in October. If even part of that becomes orders, Westinghouse could matter more to the stock over five years than a few dollars on the uranium price.

The second objection is that the discount is the price of the moat, and a fair one. Utilities don't pay Cameco below spot out of generosity. They're paying for supply that shows up, and Q3 proved it does: Cameco kept delivering with its mill down by drawing on committed purchases and about 4 million borrowed pounds. A miner that sold everything at spot would earn more today and have no customers locked in when the cycle turns. The table also has a blind spot. It holds today's contracts fixed, so new contracts that float near US$100 barely move the US$100 column, and the repricing could be there without showing up much in my number.

I accept both points, and the 9% drop probably already reflects some of this. My claim is narrower. With the long-term price near its highest since 2011, Cameco's shareholders aren't getting the uranium price until 2029 at the earliest, and the evidence that the later years are repricing isn't in the table yet.

Cameco reports its full year in February 2027 and will publish a new table. Production should recover once Key Lake is back, so I won't read much into the next quarter's margin. The number I'll add to the chart above is the 2029 realized price at a US$100 spot. If it reaches US$88 or more by the year-end or Q1 2027 table, Cameco is turning this market into better contracts and I'm wrong. If it stays at US$85 while the long-term price holds above US$90, the contracts are still protecting the customers more than the shareholders.