Energy Fuels To Gain From Increase In Uranium Spot Price: Analyst Sees Higher Demand, Focus On Nuclear Energy

Roth MKM analyst Joe Reagor reiterated a Buy rating on Energy Fuels Inc UUUU, raising the price target to $9.50 from $8.50.

Reagor increased the near-term and long-term uranium price forecasts in response to an earlier-than-anticipated increase in the uranium spot price.

Since July 2023, the spot price of uranium has increased from $54 per pound to over $72 per pound, notes the analyst. 

Reagor attributes this sharp increase to several factors including geopolitical issues and increasing demand driven by a renewed focus on nuclear energy. 

As a result, the analyst increased the long-term uranium price from $70 to $80 per pound. 

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

As a result of the higher uranium price forecast, the analyst also increased the valuation of UUUU's uranium resources. 

However, Uranium mining and sales are subject to significant regulatory oversight. As such, there exists potential for adverse regulatory decisions in any of the jurisdictions in which Energy Fuels currently hold assets, the analyst cautions.

Energy Fuels' most significant risk is the uranium price, which will significantly impact future revenues. However, Energy Fuels also has exposure to input cost fluctuations.

Price Action: UUUU shares are trading higher by 3.70% to $7.82 on the last check Tuesday.