This ASX uranium stock is jumping 7% today as brokers see more upside

After a tough month, Paladin Energy Ltd (ASX: PDN) shares are suddenly back in demand.

The uranium producer is up 6.69% to $11.15 at the time of writing, with buyers returning after a recent pullback.

Paladin shares are still down around 18% over the past month, so today’s move only claws back part of the recent fall.

But it does add another twist to what has already been a huge 12 months for shareholders.

The stock remains up more than 100% over the past year, helped by stronger interest in uranium and Paladin’s exposure to the Langer Heinrich Mine in Namibia.

So, what is pushing buyers back into the stock today?

Uranium is helping sentiment

A stronger uranium price appears to be one of the main drivers behind today’s move.

Uranium futures were recently trading above US$86.50 per pound, near their highest level in 2 months.

Prices have been supported by stronger risk appetite and growing confidence in longer-term demand from nuclear power.

Large tech companies are also adding to the interest, with nuclear energy increasingly being looked at as a power source for data centres.

Microsoft Corp (NASDAQ: MSFT) and Meta Platforms Inc (NASDAQ: META) have both been linked to nuclear power agreements, while US policy has also become more supportive of nuclear energy.

This gives investors another reason to look at uranium producers such as Paladin.

Paladin owns the Langer Heinrich uranium mine in Namibia and has projects across Australia, Canada, and Africa.

Brokers are still interested

Broker commentary also appears to be helping sentiment.

Recent broker updates show Morgan Stanley initiating coverage on Paladin with a buy rating and a $13.05 share price target.

Macquarie has also been positive, with a $13.25 target appearing in recent broker notes.

Ord Minnett has taken a more cautious view, cutting its price target to $9.50 earlier this month.

Nonetheless, the broader broker picture is still mixed. The latest consensus shows 4 buy ratings, 3 holds, and 2 sells, with an overall recommendation of hold.

What the chart is showing

The stock is now trading around $11.14, with today’s move taking it back above its previous close of $10.45.

The day’s range so far is $10.67 to $11.15, while the 52-week range is $5.74 to $15.10.

The chart also shows Paladin sitting below the middle of its recent Bollinger Band range.

The upper band is around $13.75, while the lower band is near $9.56.

Its relative strength index (RSI) is sitting around 46, which tells us the stock isn’t looking heavily overbought after its recent fall.

The post This ASX uranium stock is jumping 7% today as brokers see more upside appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy now
• Up about 80% this year, these ASX uranium stocks are still a buy
• Why CBA, Paladin Energy and CSL shares crashed  9% to 17% this week
• Are Paladin Energy shares a buy after crashing 14% this week?
• Why CBA, Healius, Paladin Energy, and Temple & Webster shares are sinking today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group, Meta Platforms, and Microsoft. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Meta Platforms and Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.