Uranium is an essential source of fuel for nuclear power plants. Nevertheless, spot prices for uranium had remained at less than $50 from 2012 to mid-2021. Uranium prices now seem to be making a comeback, with its spot price rising to a…
$50.80 nine-year high last September. The rise in spot prices has been driven by increasing demand and massive supply disruptions.
The demand for uranium is expected to rise because major economies, including China, Russia, and India, are constructing new nuclear reactors. In a quest to achieve net-zero carbon emissions, renewed interest in uranium has been fostered worldwide. Major economies like Japan, the United Kingdom, and member nations of the European Union have all announced that utilizing nuclear energy is a part of their climate change programs. In addition, the Biden administration’s $1.2 trillion bipartisan Infrastructure Investment and Jobs Act focuses on a “more equitable clean energy future,” thereby putting nuclear projects back in the spotlight. The World Nuclear Association’s Nuclear Fuel Report indicates a 27% increase in uranium demand during 2021 – 2030. Furthermore, the ongoing Ukraine-Russia crisis is expected to put upward pressure on uranium prices because Ukraine is the world’s ninth-largest uranium producer.
Given this backdrop, we think it could be wise to add uranium stocks Uranium Energy Corp. (UEC – Get Rating) and Ur-Energy Inc. (URG – Get Rating) to one’s watchlist. Wall Street analysts expect these stocks to rally by more than 45% in price in the near term.
UEC is a uranium mining and exploration company. The Corpus Christi, Tex.-based company is focused on exploring, pre-extraction, extraction, and processing, with uranium projects located in the United States and Paraguay.
On Dec. 20, 2021, UEC announced that it had acquired all the issued and outstanding Uranium One Americas, Inc. (U1A) shares. President and CEO Amir Adnani said, “We are very pleased to have closed this highly accretive transaction for UEC. The acquisition doubles out production capacity in three key categories: total number of permitted U.S. ISR projects, resources, and processing infrastructure.”
UEC’s total comprehensive loss narrowed 60.6% year-over-year to $1.93 million for the first quarter, ended Oct. 31, 2021. In addition, its net loss narrowed 58.2% year-over-year to $2.07 million. The company’s net loss per share narrowed 66.6% year-over-year to $0.01. Also, its cash, cash equivalents, and restricted cash, came in at $98.34 million, representing a 1,051.5% increase year-over-year.
Analysts expect UEC’s EPS for its fiscal year 2022 to increase 114.3% year-over-year to $0.01. Its revenue for fiscal 2023 is expected to increase 482.8% year-over-year to $25.47 million. And over the past year, the stock has gained 76.4% in price to close the last trading session at $4.25. However, Wall Street analysts expect the stock to hit $7 in the near term, indicating a potential 64.7% upside.
URG is a Littleton, Colo.-based exploration-stage mining company that acquires, explores for, develops, and produces uranium mineral resources located primarily in Wyoming. The company holds interest in 12 projects located in the United States.
For its fiscal third quarter, ended Sept. 30, 2021, URG’s cost of sales declined 7.4% year-over-year to $1.70 million, while its cost of sales for the nine months ended Sept. 30, 2021, decreased 54.5% year-over-year. The company’s gross loss narrowed 7.9% year-over-year to $1.69 million. Also…
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