If you are wanting to invest in the uranium industry right now, then Boss Energy Ltd (ASX: BOE) shares could be the way to do it.
That's the view of the team at Bell Potter, which is tipping the ASX 200 uranium stock to deliver big returns over the next 12 months.
What is the broker saying about this ASX 200 uranium stock?
Bell Potter notes that the uranium producer released its quarterly update this week and reported production a touch below expectations. However, this negative was offset by higher than expected sales. It commented:
Drummed production was slightly below our estimate (BPe 100klbs, in-line with VA cons), however uranium in circuit of 110klbs was positive. Sales was ahead of our estimate with the 200klb sale, and we are pleased to see the first shipment met specifications. Focus will continue to remain on connection of the 3 rd IX column this quarter, and the progression of the ramp up of column #2.
Over CY25 BOE will target connection of a further 3 IX columns (back half CY25), which will aid in the expansion to 2.45Mlbs. Importantly, BOE has recorded positive operating cashflow of A$9.5m, which should be bolstered as deliveries replace drawn down inventory at ConverDyn.
Big returns
In response to the update, 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 $3.60, this implies potential upside of just under 60% for investors over the next 12 months.
Bell Potter is bullish on Boss Energy due to its positive outlook on uranium and its geographically diversified operations. It explains:
Our target price is unchanged at $5.70/sh, which is derived from a 10% premium to our DCF sum of the parts valuation of $5.18/sh. Uranium fundamentals continue to support our thesis being 1) advancement in Nuclear energy across the globe (64 reactors currently under construction) filtering through to a growing demand for U3O8 and 2) a lack of nearterm supply as producers exited the market post Fukushima. The recent acquisition of a 30% interest in the Alta Mesa joint venture, diversifies BOE's operations and revenue streams, making BOE one of only a handful of geographically diversified uranium producers in CY24.
All in all, the broker believes this could make Boss Energy a great ASX uranium stock to buy now if you want exposure to the nuclear energy thematic.
