Is ASX 200 uranium share Paladin Energy a buy at around 73 cents?

Is Paladin Energy a buy?

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Key points

  • ASX 200 uranium share Paladin Energy has jumped 13% in a year
  • This company is planning to restart a uranium mine in Namibia by early 2024 
  • One analyst tips Paladin shares could surge by nearly 37% 

ASX 200 uranium share Paladin Energy Ltd (ASX: PDN) has risen 13% in a year, but is now a good time to buy?

Paladin shares have jumped 13% from 64 cents at market close on 16 June 2022 to 72.5 cents at the time of writing. For perspective, the S&P/ASX 200 Index (ASX: XJO) has jumped nearly 10% in a year.

So what is the outlook for the Paladin Energy share price?

Can this ASX 200 uranium share go higher?

Paladin Energy is a uranium explorer with a 75% stake in the Langer Heinrich mine in Namibia. Paladin is aiming to bring this mine to production in the first quarter of the 2024 calendar year.

Analysts at Bell Potter have placed a "speculative buy" rating on the Paladin Energy share price with a 99 cent price target.

This implies a nearly 37% upside based on the ASX 200 uranium company's latest share price.

The team at Bell Potter is positive on Paladin amid planned production at the Langer Heinrich mine.

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).

Paladin'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.

Paladin advised in a quarterly report early this year that the Langer Heinrich project is "on track and on budget" for first production. More than 600 staff have been deployed to the site.

As of 31 March 2023, Paladin already had five uranium offtake agreements with companies in the USA, Asia and Europe. Commenting on the company's strategy for securing contracts, Paladin said:

Paladin has a stated strategy to secure contracts ahead of production. These contracts range in duration and pricing, and provide base-escalated, fixed-price and market-related pricing mechanisms.

Paladin Energy share price snapshot

The Paladin Energy share price has climbed nearly 4% year to date and close to 11% in the past month.

This ASX 200 uranium share has a market cap of about $2.2 billion based on the latest share price.

Motley Fool contributor Monica O'Shea 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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