The last 12 months have been reasonably positive for ASX uranium shares.
As we recently covered here, many uranium shares outperformed the market during the 2022 financial year. This includes Boss Energy Ltd (ASX: BOE) and Paladin Energy Ltd (ASX: PDN), which recorded strong gains over the period despite broad sector weakness in April.
But that was then. What about the future? Letâs take a look and see what may lie ahead for ASX uranium shares in FY 2023.
What is the outlook for ASX uranium shares?
The team at Bell Potter has been looking at the uranium sector and believes that weakness since April has created “selective opportunities.”
It commented:
ASX Uranium equities are on average down 44%, vs the ASX300 Resources Index of 19%. The sell-off, in our opinion, has been indiscriminate in the case of BOE and PDN and completely irrespective of 1) broader uranium market fundamentals and 2) company specific situations. The April sell-off has created an interesting opportunity to build/establish positions in either of these two companies.
Valuations for BOE and PDN 40% off from April highs â BOE and PDN are now trading at ~40% discounts to their April high, on a Market Value/ Resource pound metric. In addition to this, we believe there is further upside for both businesses as per our stated valuations.
However, the broker does acknowledge that “shorts continue to build,” with both companies experiencing rising short interest despite the selloff.
Nevertheless, Bell Potter has reiterated its speculative buy ratings on both companies. It has a $3.32 price target on Boss Energy’s shares and a $1.06 price target on Paladin Energy’s shares.
Overall, the broker remains positive on uranium due to its belief that reach net zero ambitions would be difficult with nuclear power.
The post Will ASX uranium shares be market-beaters in FY23? appeared first on The Motley Fool Australia.
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More reading
- The ups and downs for ASX uranium shares in the 2022 financial year
- Here are the top 10 ASX shares today
- Lake Resources shares are the most traded today. What’s going on?
- Here are the top 10 ASX shares today
- Why the Paladin share price fell 25% in June
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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