What happened
Shares of uranium mining companies are red-hot Thursday. As of 12:40 p.m. EDT, both Energy Fuels (UUUU 1.03%) and Uranium Energy (UEC 0.19%) stocks are up 6.9% apiece, while Ur-Energy (URG 4.07%) is leading the pack higher with a 9.1% gain.
And you can probably thank GLJ Research for all of that.

Image source: Getty Images.
So what
In a short note posted on Twitter yesterday, you see, GLJ raised its price target on yet another uranium mining company. The analyst's positive comments (and 38 Canadian dollar price target) on uranium miner Cameco (CCJ 2.62%) nonetheless seems to have gotten a lot of investors excited throughout the uranium sector.
GLJ cited the creation of the Sprott Physical Uranium Trust -- a commodity fund that buys and holds physical uranium as an "alternative for investors," and indeed "the world's largest" such fund -- as its reason for optimism. As the analyst explained, Sprott's "aggressive purchasing strategy" of physical uranium creates "potentially massive" upside for uranium mining stocks. Β
Cameco $CCO $CCJ Price Targetπ― raised to C$38 from C$27 by analyst Gordon Johnson of @GLJ_Researchπ as he sees @Sprott's entry into the #uranium Spot market with the Sprott Physical Uranium Trust as the next "potentially massive" upside bull catalyst for the shares.π€ π #ESG πββοΈ pic.twitter.com/xjoLazOS8J
β John Quakes (@quakes99) September 1, 2021
Now what
How massive are we talking here? According to GLJ, the spot price of uranium could conceivably be pushed up to "a level not seen since January of 2016" by Sprott's buying activity.
Uranium Spot Price data by YCharts.
But here's the thing: Even if GLJ is right about that, well, as you can see up above, uranium spot prices in January 2016 averaged only about $35 a pound. But as MiningReview.com pointed out back in June, it would take prices of $60 a pound to "incentivize" uranium miners to dig up more of the stuff than they're already doing -- or put another way, to make mining uranium profitable enough to be worth the trouble.
Conclusion: January 2016 prices may not be good enough to save the uranium miners -- and today's jump in share prices at Energy Fuels, Uranium Energy, Ur-Energy, and yes, Cameco, too, look like an overreaction.