Jefferies has initiated coverage on two nuclear energy stocks, Cameco Corp (CCJ.US) and BWX Technologies Inc (BWXT.US), with "Buy" ratings and price targets of $138 and $181, respectively. The firm believes the global nuclear power sector is entering its most robust demand cycle in 40 years.

Analyst Laurence Alexander highlighted that Cameco, among the world's largest uranium fuel suppliers, is well-positioned to secure higher contract prices through its vertical integration of low-cost mines and reactor designs, covering deliveries extending to 2040. Alexander noted that the company is a prime beneficiary of Western nuclear energy expansion, as over 30 countries have committed to tripling nuclear capacity by 2050. This comes as hyperscale data centers demand baseload power for artificial intelligence, and Russia's exclusion has escalated uranium conversion and enrichment incentives to incentivizing levels.

Based on sum-of-the-parts valuation, Alexander estimates Cameco's upstream assets at $63 per share by end-2027, conversion assets at $11 per share, undeveloped resources and corporate assets at $7 per share, and a $51 per share value from its long-term partnership with the U.S. government's Westinghouse.

For BWX Technologies, Alexander expressed preference due to its operational leverage in maintaining and expanding commercial nuclear plants. Additionally, as the sole supplier of naval nuclear reactors and fuel for the U.S. Navy, its unique position shields it from direct profit-and-loss volatility linked to uranium or concentrate price swings. Given the robust nuclear cycle, the analyst forecasts 6%-7% sales growth and 13%-17% EPS growth for BWX Technologies through 2030, with momentum likely persisting to 2040 barring policy disruptions.

Beyond these two, Alexander also initiated "Buy" ratings on Denison Mines (DNN.US), enCore Energy (EU.US), Mirion Technologies (MIR.US), NexGen Energy (NXE.US), and Solstice Advance Materials (SOLS.US). Meanwhile, "Hold" ratings were assigned to Centrus Energy (LEU.US) and Uranium Energy (UEC.US).