Now could be the time to buy Boss Energy Ltd (ASX: BOE) shares.
That's the view of analysts at Bell Potter, who are feeling bullish about this uranium producer in March.
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What is the broker saying?
Bell Potter notes that Boss Energy released its half-year results last week. While it wasn't overly impressed by them, it saw enough to become more positive. It said:
BOE reported a rather lacklustre set of results, which at the headline continue to be impacted by the accounting treatment of inventory sales. Looking under the hood, operating cash flow was robust, and provided a better representation of the financials.
The broker also highlights that the company's Honeymoon Project review is progressing. It believes that this review could be a catalyst to a major re-rating if successful. It adds:
The ongoing Honeymoon Project review is progressing, with the commencement of wide-spaced drill configurations underway targeting areas around wellfields B1-B5 with varying spacings up to 100m. Initial guidance was for residence time of roughly ~90 days, meaning that results could begin to filter through around the beginning of April. Should this prove to be a success, we suspect BOE will re-rate strongly. Whilst BOE remains the most shorted stock on the ASX, the short interest (16%) has pared back markedly ahead of the results.
Boss Energy shares upgraded
According to the note, the broker has upgraded Boss Energy shares to a buy rating (from hold) with an unchanged price target of $1.95. Based on its current share price of $1.64, this implies potential upside of 19% for investors over the next 12 months.
Commenting on its upgrade, Bell Potter revealed that it made the move on valuation grounds following recent share price weakness. It concludes:
We make no adjustments to our TP in this note, but take the opportunity to upgrade BOE to Buy (previously Hold), following deterioration in the price. We continue to see the market positioning for a negative outcome in the upcoming wide-spaced wellfield program, creating an asymmetric risk opportunity in our opinion.
Adding to this thesis, the continued increase in uranium prices (Spot US$88/lb or A$124/lb and Term US$89/lb A$125/lb), increases near-term margins and cashflow, further bolstering the balance sheet. EPS changes in this report are FY26 -36%, FY27 -1% FY28 nc.
