S&P/ASX 200 Index (ASX: XJO) uranium share Paladin Energy Ltd (ASX: PDN) was on a tear. Right up until mid-May.
Then things started to go downhill.
On 21 May Paladin Energy shares closed the day trading for $17.80 apiece. This saw the ASX 200 uranium share up around 150% over the prior 12 months.
At the time of writing today, shares are swapping hands for $8.24 each, down 0.9% in intraday trading and down a painful 54% since the close on 21 May.
Some of the selling pressure has come amid a retrace in global uranium prices. A retrace that caught many analysts by surprise and threw up headwinds for every uranium producer.
In mid-May, uranium was trading for US$94 per pound. Today, that same pound is selling for US$78, down some 17%.
But Paladin Energy has also faced its own company-specific hurdles as it works to ramp up its African-based uranium mine to full production.
Those ongoing struggles are a red flag for Red Leaf Securities' John Athanasiou, who has a sell recommendation on the stock (courtesy of The Bull).
What's happening with the ASX 200 uranium share?
"This uranium producer owns 75% of the Langer Heinrich Mine in Namibia," Athanasiou explained.
As for why the ASX 200 uranium share has come under heavy selling pressure, he said:
The share price recently plunged after the company downgraded production guidance for fiscal year 2025 from 4 million to 4.5 million pounds to 3 million to 3.6 million pounds.
It withdrew all other guidance in relation to fiscal year 2025. The downgrade followed lower than expected production results in October and ongoing challenges in ramping up production at the Langer Heinrich Mine.
While you may wish to keep Paladin Energy shares on your watchlist, Athanasiou believes there are better candidates to consider right now.
"We prefer others until Paladin can demonstrate reliable operational performance," he said.
Paladin Energy's big November plunge
The Paladin Energy share price plunged 28.9% on 12 November when the ASX 200 uranium stock delivered its update on the Langer Heinrich Mine operations.
In downgrading its production guidance for FY 2025, management pointed to "ongoing challenges and operational variability experienced to date in ramping up production".
Also likely spooking investors, the company noted that the slower-than-expected production increase "will have a material impact on the company's unit operating costs."
Looking ahead and sounding a positive note for the latter half of 2025, management said:
Production levels are expected to increase as the overall ramp-up program is progressed and due to the processing of higher grade mined ore which is expected to commence in the second half of CY 2025.
The ASX 200 uranium share has gained 20% since the 12 November price crash. But it's still trading 15% below the 11 November closing level.
