In a March 16 research note, analyst Katie Lachapelle reported that Canaccord Genuity increased its target price on Uranium Energy Corp. (UEC:NYSE AMERICAN) following its release of Q2/21 results and its announced commitment to building a uranium inventory.
Canaccord Genuity's new target price on Uranium Energy is $3.50 per share, up from its previous $2.15 per share target. Currently, the stock is trading at about $2.90 per share.
Lachapelle also reported that Uranium Energy took a step forward on its new initiative by entering into an agreement to buy 400,000 pounds of uranium concentrates for $10.9 million, paying the current spot price of $27.29 per pound.
"UEC's purchase is well timed, frontrunning our forecast that uranium prices will rise over 2021 (Canaccord Genuity estimates $36 per pound by year-end)," Lachapelle noted.
She explained the benefits to the Texas-based company of developing an inventory of the metal. Along with affording Uranium Energy the opportunity to take advantage of low spot prices, it will allow for the company's balance sheet to expand as prices rise.
The initiative gives Uranium Energy an inventory with which to market to utilities, and thus, potentially speed up cash flow.
Finally, the initiative allows the company to focus on production to meet U.S.-based uranium demand, that of the U.S. Uranium Reserve in particular.
"Allocations for this reserve are expected to be announced in late 2021 or early next year and should be a significant catalyst for Uranium Energy Corp.'s shares," wrote Lachapelle.
The analyst also pointed out that the company has strengthened its balance sheet, recently raising $30 million in gross proceeds and reducing debt to $10 million from $18 million. Uranium Energy now has about $65.8 million in cash and equity holdings versus the $15 million it had at the end of Q1/21.
"The company is well funded to advance development and eventual construction in South Texas, predicated on higher uranium prices and/or an allocation of the uranium reserve," Lachapelle indicated.
She reiterated that Uranium Energy could begin production, at a low cost of $3 million, in six to nine months' time from when it decides to restart, the latter expected in early 2022.
Canaccord Genuity rates Uranium Energy Speculative Buy.
Read what other experts are saying about:
Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Uranium Energy Corp. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Uranium Energy Corp., a company mentioned in this article.
Disclosures from Canaccord Genuity, Uranium Energy Corp., Raising Target Price, March 16, 2021
Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst's knowledge, she/he is not in receipt of material non-public information about the issuer.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Required Company-Specific Disclosures (as of date of this publication)
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Uranium Energy Corp. in the next three months.
