A court ruling in favour of Cameco Corp. in its long-simmering tax dispute with Canada Revenue Agency has lifted a concern that had weighed on the uranium producer’s share price for several years, sending its stock soaring on Thursday.
The share price jumped 15.7 per cent, to $14.80 in Toronto, for its biggest gain in nearly 10 years, and executives beamed.
“I do not think it could have been more clear on any of the issues,” Tim Gitzel, Cameco’s chief executive officer, said during a conference call. “So we’re absolutely delighted with the decision.” The Tax Court of Canada ruling released on Wednesday said Cameco had not violated Canadian law by selling uranium through a European subsidiary to reduce its tax bill.
Some analysts also responded favourably: “The decision likely removes a significant overhang from the stock and should reinstate its position as the premier investment for uranium exposure,” Alexander Pearce, an analyst at BMO Nesbitt Burns, said in a note.
Mr. Pearce upgraded his recommendation on the stock to “outperform” from “market perform,” and raised his expectation of where the shares should be trading within 12 months to $16 from a target of $14.