Paladin Energy Ltd (ASX: PDN) shares are outperforming in 2025.
Since the start of the year, the ASX 200 uranium share is up almost 22%.
But if you thought the gains were over, think again.
That's because analysts at Bell Potter believe this uranium producer's shares could still be cheap.
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Why this ASX 200 uranium share could be cheap
Bell Potter notes that Paladin Energy released its first quarter update this week and delivered a production result ahead of its expectations and costs tracking below its full year guidance. It said:
Uranium production was 1.07Mlbs (BPe 1.0Mlbs, consensus 1.017Mlbs), a 7.7% increase on 4QFY25. Mill throughput was slightly below 4QFY25 at 1.15Mt (4QFY25 1.17Mt), with grade (477ppm) and recoveries (86%) flat QoQ. Sales were 0.534Mlbs (- 25% QoQ), with closing uranium inventory at 1.8Mlbs (up from 1.19Mlbs). Average realised price was US$67.4/lb, up from US$55.6/lb in 4QFY25 (estimated revenue US$36m, with additional cash received of US$29m for a sale to be recorded in 2QFY26).
C1 costs were US$41.6/lb produced (FY26 guidance US$44-$48/lb). Direct capex was US$1.1m with US$6.9m being incurred on stripping costs and US$5.3m incurred on low-grade stockpile costs. PDN finished 1QFY26 with cash and investments of US$269m and a US$50m revolving credit facility.
The broker believes this solid performance is building confidence in its outlook and feels it is well-placed to achieve its guidance for the full year. It adds:
PDN is beginning to demonstrate steady reliable production at Langer (LHM), which bodes well for building confidence in management's forward guidance. As we previously highlighted, PDN repeating the performance of 4QFY25 over 1HFY26 creates a platform for the business to hit the upper end of the 4.0-4.4Mlbs production guidance, with increased mining rates over 2HFY26.
Time to buy
Bell Potter has responded to the update by retaining its buy rating with an improved price target of $11.35 (from $10.30).
Based on its current share price of $9.62, this implies potential upside of 18% for investors over the next 12 months.
Commenting on its buy recommendation for the ASX 200 uranium share, Bell Potter said:
Our target price is increased to $11.35/sh (previously $10.30) on adjustments to our production, sales and costs. 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 Patterson Lakes South (PLS), which provides upside as the project is de-risked.
