'Material discount': Broker says this ASX 200 uranium stock can rise 100%!

Bell Potter thinks this stock is trading at a material discount and sees scope for it to double in value.

| More on:
A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today

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

sdf

If you have been thinking about gaining exposure to the uranium industry, then now could be the time to do it.

That's because Bell Potter believes that one ASX 200 uranium stock could be destined to double in value over the next 12 months.

Which ASX 200 uranium stock?

The stock in question is Boss Energy Ltd (ASX: BOE).

It is a uranium company that owns the Honeymoon project in South Australia.

This project recently commenced production after being on care and maintenance since it was acquired by the ASX 200 uranium stock back in 2015.

In addition to Honeymoon, Boss Energy holds a 30% interest in the Alta Mesa ISR project in South Texas. The remaining 70% is owned and operated by enCore Energy (NASDAQ: EU).

What is the broker saying?

Bell Potter has been looking over the company's recent half year results, which revealed significantly higher than expected costs. However, the broker highlights that this number isn't quite how it first appears. It explains:

BOE recorded revenue of $47.8m (BPe $48.1m) and operating costs of $48.1 (BPe $22m). The primary reason for the difference is an accounting treatment on the sale of inventory (0.4Mlbs), which is measured (for a COGS purpose) at fair value rather than at cost (BOE purchased the inventory at US$30.15/lb vs the average unit cost applied in the results of ~US$77/lb). […] The overall result was a 1HFY25 loss of $9.5m vs BPe profit of $12.2m.

Operating cash flow was $17.5m, which provides a better indication of the underlying business in our opinion. Receipts from customers were $48.6m on costs of $30.1m. Payments for mine development (Honeymoon and Alta Mesa) were $19.1m, plant and equipment expenditure was $2.9m and net cash declined by $1.9m to close at $65m. Liquidity (cash + uranium inventory + listed investments) was $251m.

'Material discount'

In light of the above, the broker remains very positive on the ASX 200 uranium stock and has retained its buy rating with a trimmed price target of $4.80 (from $4.85).

Based on the current Boss Energy share price of $2.38, this implies potential upside of 102% for investors over the next 12 months.

Commenting on its buy recommendation, the broker said:

We maintain the view that BOE is trading at a material discount for a resources company with a stable balance sheet and beginning to generate stable cashflow. A successful 3QFY25 result and updated Mineral Resource Estimate for satellite deposits over the next two months remain key catalysts for a re-rate in our opinion.

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

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

Why did ASX 200 energy shares rip up the charts on Friday?

Analysts say oil prices are on track for their best week since February 2022.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant.
Energy Shares

$10,000 invested in Santos shares 5 years ago is now worth…

Have Santos shares beaten the ASX 200 over five years? Let’s find out.

Read more »

a man in a business suit looks at a map of the world above a line up of oil barrels with a red arrow heading upwards above them, indicting rising oil prices.
Energy Shares

Woodside, Santos, and this ASX energy stock are storming higher on oil price jump

Oil prices jumped overnight amid escalating tensions between the US and Iran.

Read more »

Young man in shirt and tie staring at his laptop screen watching the Paladin Energy share price tank today
Energy Shares

Looking for opportunity? This sector has fallen the furthest in 2025

Whilst the ASX 200 has largely rebounded from a turbulent start to the year, this sector is yet to recover. 

Read more »

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Share Gainers

The Coronado Global share price just surged to a 114% weekly gain. Here's why

Investors have sent the ASX coal stock flying higher in June. But why?

Read more »

Worker inspecting oil and gas pipeline.
Dividend Investing

Should I buy Woodside shares today for their 8% dividend yield?

With an 8% dividend yield and a resurgent share price, should I buy Woodside shares right now?

Read more »

Happy coal miner.
Share Gainers

Up 75% this week, why is this ASX All Ords stock rocketing again today?

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »

Man pointing at a blue rising share price graph.
Share Gainers

Guess which ASX 300 stock just rocketed 43% on big news!

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »