Paladin Energy Ltd (ASX: PDN) shares will be in focus next week.
That's because the uranium producer is scheduled to release its quarterly update on 14 October.
Should you invest in the ASX 200 uranium stock before the release of this update? Let's see what Bell Potter is saying.
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What is the broker saying?
Bell Potter is expecting a decent quarterly update from the company next week, with production increasing modestly quarter on quarter and in line with consensus estimates.
However, it sees scope for the ASX 200 uranium stock to outperform expectations. It explains:
PDN are due to report 1QFY26 results on the 14th of October. We estimate production of ~1Mlbs (+1% QoQ, VA 1.02Mlbs) derived from mill throughput of 1.2Mt at an average grade of 450ppm at 81% recovery. This compares to throughput of 1.17Mt, grade of 477ppm and recoveries of 81% in 4QFY25.
We believe the expectations from our numbers and consensus set a low hurdle rate to beat. As highlighted in previous notes, PDN's full year guidance of 4-4.4Mlbs is 2H weighted, when the mining fleet is in full operation. To reach the mid-point of guidance by the end of 1HFY26, PDN needs a repeat of 4QFY25 operating metrics and production. We believe the business has carefully managed expectations to avoid unforeseen circumstances as was the situation in FY25.
Should you invest?
Bell Potter thinks now could be a good time to invest in the ASX 200 uranium stock. Especially given how its shares have underperformed peers as uranium prices rebounded. It adds:
As uranium prices increased (spot $81/lb +3.5% QoQ, Term US$83/lb + 3.8%) so too has the ASX peer group of uranium equities (average 1M gain – 36%. However, PDN has lagged the peer group, particularly over the last month (PDN +11% Vs ASX peer group average +36%). When we take a broader view, PDN's valuation appears comparatively cheap vs the domestic and international peer group, particularly considering the production capacity across the business.
According to the note, the broker has retained its buy rating on the company's shares with an improved price target of $10.30.
Based on its current share price of $8.98, this implies potential upside of 15% for investors over the next 12 months. It concludes:
PDN is entering a period of relative stability, with a rising uranium spot and term price. As LHM production steadies, the market should gain comfort around the performance of the asset and value the business without the discount overhang. As it stands, the market is ascribing very little value to PLS, which provides upside as the project is de-risked.
