2 ASX uranium shares to buy for 80%+ returns

Bell Potter thinks that these stocks could deliver very big returns for investors.

| More on:
A man wearing glasses and a white t-shirt pumps his fists in the air looking excited and happy about the rising OBX share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The uranium industry has been generating big returns for investors over the last few years.

But if you thought the gains were over, think again.

The two ASX uranium shares listed below have been named as buys and tipped by Bell Potter to rise strongly from where they currently trade. Here's what you need to know about them:

Lotus Resources Ltd (ASX: LOT)

The first ASX uranium share that could be a buy is Lotus Resources. It is an Africa-focused advanced uranium player that owns an 85% interest in the Kayelekera Uranium Project in Malawi, and 100% of the Letlhakane Uranium Project in Botswana.

Bell Potter believes that deep value is emerging in its shares based on its long term uranium price estimates. In fact, it suggests that if you are waiting for a cheap opportunity, then now is your time. It said:

At the current stock price, assuming our risk discounts for Kayelekera and Letlhakane, and a dilutionary equity raise, LOT is pricing a ~US$63/lb spot uranium price into perpetuity. Assuming these two contracts are at or near the current long-term offtake pricing levels of US$80/lb, this implies that LOT is deep value. Cost overruns for both Opex and Capex would need to be substantial to justify such discounts, with the likely conclusion being that equity markets ascribe little value to Letlhakane and/or hold a significantly more negative view around uranium pricing.

Bell Potter has a speculative buy rating and 70 cents price target on its shares. This suggests that they could rise a massive 240% from current levels. Though, given its speculative rating, this may only be suitable for investors with a very high tolerance for risk.

Paladin Energy Ltd (ASX: PDN)

Bell Potter thinks that Paladin Energy could be a great way to gain exposure to the uranium market.

Particularly given that it could be regarded as a lower risk option in the space. It said:

PDN operating a uranium asset in a bull market for the commodity is likely to command a premium to the sum-of-the-parts valuation in our opinion. We have applied a 10% premium to our base valuation which is supported by 1) PDN being a current producer with a comparatively lower risk restart project at Langer Heinrich, and 2) PDN offering domestic institutional investors greater liquidity than peers. Additional factors which may support this thesis would include consolidation and M&A activity.

The broker has a buy rating and $15.70 price target on the ASX uranium share. Based on its current share price of $8.76, this implies potential upside of approximately 80% for investors over the next 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A young man punches the air in delight as he reacts to great news on his mobile phone.
Energy Shares

Macquarie tips 23% upside for this ASX All Ords mining stock

Let's see why the broker thinks this stock could be a top buy.

Read more »

a group of three electricity workers stand smiling wearing hard hats and high visibility vests in front of an array of high voltage power equipment.
Energy Shares

Macquarie raises price target on Origin Energy shares

The broker just raised it's price target. Here's why.

Read more »

A smiling woman holds a Facebook like sign above her head.
Energy Shares

Bell Potter says this ASX 200 uranium stock is a top buy

Let's find out why the broker is feeling bullish on this stock.

Read more »

Worker on a laptop at an oil and gas pipeline.
Energy Shares

Boss Energy shares have surged 93% since April. Here's what Macquarie expects now

Boss Energy shares remain a favourite for ASX short sellers. Are they in a for a payday or headed for…

Read more »

A young man wearing glasses writes down his stock picks in his living room.
Energy Shares

3 reasons to buy this beaten down ASX 200 coal stock today

A leading expert forecasts a big potential rebound ahead for this quality ASX 200 coal stock.

Read more »

Female miner uses mobile phone at mine site
Energy Shares

Here are the latest growth forecasts for the Pilbara Minerals share price

Can investors charge up their returns with this ASX lithium share?

Read more »

An oil worker in front of a pumpjack using a tablet.
Energy Shares

Top 5 ASX 200 energy shares of FY25 amid a challenging year for sector

The energy sector was the weakest of the 11 market sectors in FY25.

Read more »

An oil worker on a tablet with an oil rig in the background.
Energy Shares

Buying Woodside shares? Here's the latest oil price forecast from Goldman Sachs

Here’s what Goldman Sachs is forecasting for the oil price in the year ahead.

Read more »