NexGen Energy Ltd (ASX: NXG) shares are trading significantly higher today amid broad support for the uranium sector; however, it’s the company’s longer-term plans that have brokers attaching bullish share price targets.
The ASX uranium stock has more than doubled over the past 12 months â indeed, for those who got in at the low of $6.44, it has almost tripled to now be changing hands for $17.56.
But three brokers we surveyed all thought the company’s shares had further to go.
So let’s look at the big news underpinning the share price rise in recent days.
Major approval a milestone
Naturally, the ructions in the energy market from the war in the Middle East have played a part in bolstering support for uranium shares; however, NexGen has had some big news of its own.
The company said late last week that it had received the final approval necessary to build its Rook 1 uranium mine in Canada, which will be among the biggest in the world once it comes into production.
The company said regarding the project last week:
When fully operational, the Rook I Project will be the largest single source and environmentally elite uranium mine globally, incorporating state-of-the-art extraction and safety systems. In production, Rook I is capable of producing up to 30 million pounds annually â representing over 20% of the current global uranium fuel supply and over 50% of western world supply.
The company added that now that approvals were in place, it was set to begin construction.
The team, procurement, engineering, vendors, contractors and capital are in place to commence construction activities with advanced site and shaft sinking preparation. NexGen has already made its Final Investment Decision with official construction commencing in summer 2026. As per the Rook I Project schedule, construction will take 4 years from commencement.
ASX uranium stock looking cheap
The team at Shaw and Partners have had a look at the announcement, and they like what they see.
They said in a note to clients this week:
In our view the uranium market is in the early stages of a ‘super-cycle’ and we expect to see prices increase to ~US$200/lb before reverting to a long-term sustainable price of US$120/lb next decade. NexGen is one of our preferred exposures to the super-cycle. We retain our buy recommendation and $22.90 price target which is based on a DCF valuation.
UBS also has a buy recommendation on the ASX uranium stock with a price target of $21, while Bell Potter has a price target of $19.
The post Up more than 100% in a year, this ASX uranium stock has further to go, brokers say appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England 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.