If you are looking for some big returns for your investment portfolio, then Boss Energy Ltd (ASX: BOE) shares could be worth a look.
That's the view of analysts at Bell Potter, which believe the ASX 200 uranium stock could be dirt cheap at current levels.
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What is the broker saying about this ASX 200 uranium stock?
Bell Potter notes that it recently attended the Alta Mesa site visit and opening ceremony.
Alta Mesa is co-owned and operated by enCore Energy and Boss Energy and is an in-situ-recovery (ISR) style operation in South Texas.
Following the site visit, the broker has been looking at its valuation of the ASX uranium stock. It notes that even with a pessimistic price outlook, Boss Energy shares would be attractively priced. The broker said:
With uranium equities gaining momentum, we thought we would stress-test our pricing assumptions. BOE remains largely uncontracted, with the contracts they do have being market-linked with floors and ceilings, thus it is highly leveraged to the spot uranium price.
Assuming spot to perpetuity (US$82/lb) our valuation for BOE is $1,845m/$4.50 ps. Under this scenario, BOE trades on an FY26 EV/EBITDA multiple of 7.5x decreasing to 3.6x in FY27, which screens favourably against global peers.
BOE remains attractive on a pessimistic price outlook, one which if it were to hold true would see additional greenfield supply fail to enter the market, thus increasing the value (and premium) for those currently in production.
However, Bell Potter is more positive on uranium and thus its valuation is much higher than $4.50.
Big returns on the way
According to the note, the broker has reaffirmed its buy rating and $5.70 price target on the ASX 200 uranium stock. Based on its current share price of $3.42, this implies potential upside of 67% for investors over the next 12 months.
Commenting on its bullish view of the stock, the broker adds:
We have adjusted our ramp up timeline for Alta Mesa, allowing for a slower start, with higher initial unit costs. We believe BOE to be attractively priced vs offshore peers, with a high degree of leverage to rising uranium prices. Execution at Honeymoon remains critical, with 1Q results expected in late October a key catalyst.
All in all, this could make Boss Energy an ASX 200 uranium stock to buy now if you are feeling positive about the outlook of the chemical element and nuclear power.
