Buy this ASX uranium share now for 50% upside: broker

This uranium share could power your portfolio to new heights according to Bell Potter.

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The Paladin Energy Ltd (ASX: PDN) share price has been on a bit of a rollercoaster ride recently.

In just the last 30 days, the uranium developer's shares have been as low as 52 cents and as high as 71 cents.

The company's shares are currently trading towards the higher end of this range at 66 cents. But where might they be going next?

Where next for this ASX uranium share?

The good news for investors is that one leading broker believes that it could be onwards and upwards for the Paladin Energy share price from here.

According to a note out of Bell Potter, the broker has reiterated its speculative buy rating and 99 cents price target on its shares.

This implies potential upside of 50% for investors over the next 12 months.

Why buy Paladin Energy shares?

Bell Potter was pleased that the Namibian government has clarified that it does not intend to take a stake in existing mines. It commented:

The Namibian Ministry of Mines and Energy issued a statement walking back comments made earlier in the week and specifically highlighting that existing mineral or petroleum licence holders would be exempt of any free-carry ownership legislation issued in the future. We view these comments as supportive for PDN and warrant the recent re-rating. Furthermore, the comments remove potential overhang in the stock, which would have been maintained had the Namibian government not made a formal comment about whether or not existing operations would be exempt.

This is a big positive given how positive things are looking in the uranium space right now. It is for this reason that Bell Potter has its speculative buy rating on this uranium share. It adds:

We believe there is plenty of upside for PDN left on the table, with a supportive outlook for uranium and nuclear, and near-term catalysts in the restart of Langer Heinrich (BPe 1QCY24). Term contracting volumes continue to build, with reports that up to 107Mlbs have been signed year-to-date (CY22 130Mlbs and CY21 55Mlbs).

PDN's portfolio of base escalated contracts in combination with the CNNC offtake provides downside protection and significant (25%-39%) exposure to spot prices (with attractive payment terms), which we believe will benefit over the next 1-2 years.

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.

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