The last few weeks has shown the massive undervalued sector being the uranium space, with major economies struggling to reach their energy requirements for their citizens.
Over the last month the uranium price has rocketed almost 20% from approximately US$45/lb to almost US$55/lb, after countries such as Japan despite the shocks brought about by Fukushima realising that uranium is the most efficient and energy efficient way to generate power for their people.
The recent shocks in global energy markets, uranium shares have caught a bid as various nations are now looking inward at domestic energy production. Uranium itself has curled up from recent lows and is now back above its May 2022 levels at US$52/Lbs. This is the highest prices in the past 10 years.
One of the companies to take advantage of this increase in demand is Paladin Energy, which has seen almost 30% return in the last 6 months alone. The longer term price chart below shows the long term possibilities of uranium companies such as Paladin.
Chief to the volatility in uranium has been the looming energy crisis emerging in various nations, Europe in particular. Note that uranium is key in the production of nuclear energy.
Analysts from Trading Economics stated:
“Major nuclear producer France stated it will restart all of their nuclear reactors by the winter to offset Europe’s energy crunch, after corrosion issues and drying rivers that were vital for reactor cooling led to the suspension of various power plants,”
With further uncertainty of energy storage supplies heading into winter, it makes sense that alternative sources such as uranium will remain in hot contention for the time being.
In the short to medium term, the analyst consensus rating for Paladin is a $1.20 target price, with other companies in the space to see quite similar gains.