Unlike the S&P 500, which has raced 9% higher since the start of the year, UraniumEnergy(NYSEMKT: UEC) has risen modestly -- about 4%.
But one analyst believes that the uranium mining company's stock will power considerably higher. Heiko Ihle, an analyst at H.C. Wainright, raised the price target on Uranium Energy's stock Tuesday to $10.25 from $9.75. With shares of Uranium Energy closing at $6.71 that day, Ihle's price target implies upside of 53%.
Uranium prices have soared -- and so will Uranium Energy stock
The basis for Ihle's upwardly revised price target on Uranium Energy stock stems from the company's recently reported financial results for the second quarter of its fiscal 2024 and the rise in the market price of uranium. As of Jan. 31, Uranium Energy reported having more than 1.16 million pounds of uranium concentrate in its inventory, a 35% increase over the 866,000 pounds that it had in inventory at the end of October 2023. This is especially auspicious considering the spike in market price of uranium. While the spot price of triuranium octoxide had plunged to about $17.75 per pound in November 2016, it recently touched about $95 per pound on Feb. 29.
Uranium Energy may be a powerful way to fuel portfolio growth
While interest in solar and wind power have gained the most attention in recent years as alternatives to fossil fuels, nuclear energy is having a moment. There's growing bipartisan support in Washington for nuclear power. The House of Representatives recently passed the Atomic Energy Advancement Act, 365-36, in support of developing new nuclear power assets. Should the legislation make it to the Oval Office for the president's signature, shares of Uranium Energy will certainly soar. But that's not the only catalyst for the company which bills itself as the "fastest-growing North American uranium company." Should it remain on schedule and restart operations in 2024 at its assets in Texas and Wyoming, it's likely that shares will drive higher.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
