The uranium sector has been catching the eye recently with some ASX uranium stocks making big moves.
One of those was Boss Energy Ltd (ASX: BOE), which jumped 13% on Tuesday following the release of its quarterly update.
But if you thought the gains were over, think again. That's because Bell Potter believes there's still plenty of upside ahead for investors buying at current levels.
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What is the broker saying about this ASX uranium stock?
According to the note, the broker was pleased with the company's performance during the quarter. It said:
Production was 296klbs (BPe 300klbs -1.3%, VA cons pre-result 268klbs), sales were 150klbs with a further 118klbs returned from the loan with enCore at an average price of US$84/lb (A$133/lb).
In light of this and management continuing to deliver on its guidance, Bell Potter feels that short sellers are in a risky position. It explains:
BOE continues to deliver on guidance, which should bode well for the stock in due course. The current short interest of ~25% (+103m shares) appears over extended in our opinion, particularly considering 1) An updated Resource estimate for Jasons and Goulds in 3QCY25, which will lay out extension opportunities beyond the initial mine life at Honeymoon, 2) stabilisation in the spot price at US$65/lb, increasing to US$67/lb this past week and 3) cost performance that is beating analyst expectations.
Big returns
The note reveals that in response to the ASX 200 uranium stock's quarterly update, the broker has reaffirmed its buy rating and $4.65 price target.
Based on its current share price of $3.17, this implies potential upside of 47% for investors over the next 12 months.
To put that into context, a $10,000 investment would turn into approximately $14,700 if Bell Potter is on the money with its recommendation.
The broker then concludes:
Our target price is unchanged at $4.65/sh following the incorporation of the 3Q result and we retain our Buy recommendation. At spot prices, BOE trades on a Fwd EV/EBITDA multiple of 10.4x in FY26 and 12.0x in FY27 (once production is fully ramped up), under our price deck this comes down to 3.2x and 3.8x. We continue to see positive fundamentals for uranium, absent the depressed spot price, and forecast a strong 4QFY25 result for Honeymoon. EPS adjustments are: FY25 -51%, FY26 +1%, FY27 +1%.
This could make Boss Energy worth considering if you are looking for exposure to this side of the resources sector.
