Bullish On Uranium: Analyst Anticipates A Radiant Future For Uranium Energy Corp Amid Soaring Prices

Roth MKM analyst Joe Reagor reiterated a Buy rating on Uranium Energy Corp. UEC, raising the price target to $6.75 from $6.

The analyst notes that UEC sold 805,000 pounds of uranium during fiscal Q4 2023. 

Reagor previously estimated UEC would make no uranium sales during fiscal Q4 as the company was expected to withhold inventory until pricing climbed above $60 per pound. 

Since July this year, the spot price of uranium has increased from $54 per pound to over $72 per pound, owing to geopolitical issues and increasing demand driven by a renewed focus on nuclear energy.

As such, the analyst raised the long-term uranium price from $70 to $80 per pound. 

Reagor also increased Q4 2023 forecast from $60 to $70 per pound and the 2024 forecast from $62.50 to $76.25 per pound.

Mainly as a result of higher uranium price forecast, the analyst increased the valuation of several of UEC's uranium assets.

On the negative side, the analyst decreased the valuation of the company's titanium asset as the company is unlikely to advance the project in the near term.

Although most natural resource companies are more closely tied to individual commodity price performance, large business cycle forces or economic crises can impact a company's valuation significantly. UEC has a similar market risk to other uranium companies.

Price Action: UEC shares are trading higher by 2.17% to $5.41 on the last check Tuesday.