Paladin Energy Ltd (ASX: PDN) shares have caught the eye over the past 12 months with a strong return.
During this time, the ASX uranium stock has risen by over 40%.
But if you thought this meant that it was too late to invest, think again!
That's because analysts at Bell Potter are tipping more strong gains over the next 12 months.
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What is the broker saying?
Bell Potter notes that the ASX uranium stock released its half-year results last week and delivered numbers largely in line with expectations. It said:
PDN recorded revenue of US$138m (+79% vs PcP, inline with our estimate of US$139m). COGS were US$91.3m, excluding depreciation, (BPe US$93.8m), largely inline with our expectations. Profit before tax was US$9.26m, BPe US$6.2m. Finance costs were US$15m, which were above our expectations, and drove the divergence in the bottom line result.
Underlying loss after tax was -$6.6, with -$7.5m attributable to NCI and members of the parent recording a $0.872m profit, Vs BPe US$4.4m profit. EPS was US$0.2cps PDN finished the half with US$278.4m in cash and short term investments, following the A$300m equity raise, and $100m SPP.
Production ramp-up and stronger second half expected
The broker believes the second quarter was a clear improvement, particularly as the company moves through its stockpile processing phase at Langer Heinrich. The good news is that it should be onwards and upwards from here, according to Bell Potter. It said:
PDN recorded a markedly improved 2Q result, as the business completes the stockpile processing phase. The expectation, once operations rely more heavily on mined ore in the 2H, is for greater visibility on mill performance, grade and production.
We suspect that should 3Q avoid any unforeseen disruptions, PDN will be cum-upgrade. We forecast FY26 production of 4.75Mlbs, above the upper end of guidance of 4.5Mlbs.
Should you buy this ASX uranium stock?
According to the note, Bell Potter has maintained its buy rating and $15.30 price target on Paladin Energy's shares.
Based on its current share price of $11.68, this implies potential upside of 31% for investors between now and this time next year. It concludes:
We retain our Buy recommendation and $15.30/sh TP. PDN is positively exposed to rising uranium markets, with ~53% exposure to spot prices out to 2030. Production at LHM continues to improve, with transition to processing primally fresh ore, milled grades should lift from 501ppm over 1H, as should plant performance and reliability. The only risk we see is water disruptions as we enter a seasonally tricky period known for algal blooms which impact availability from the desalination plant.
