Uranium stocks have made headlines this week, with global tailwinds providing long-term upside for producers. 

In particular, Paladin Energy Ltd (ASX: PDN) has drawn significant attention from brokers.

Why the increased attention for uranium stocks?

As reported by my colleague Mark Verhoeven earlier this week, the spot price of uranium is hovering near US$90 a pound. 

However, more importantly, the long-term contract price is US$97 a pound, its highest level in more than eighteen years.

This is being driven by expectations of a gap between supply and demand. 

On the supply side, some of the world’s biggest uranium producers are facing production challenges and delays, making it harder to increase supply. 

At the same time, demand for uranium is expected to rise significantly as more countries build and rely on nuclear power. 

Utilities companies are already locking in uranium supplies years in advance because they want to make sure they have enough fuel for their reactors. 

If demand keeps growing while supply remains tight, uranium prices could stay strong or rise, which could benefit companies that produce or develop uranium projects. 

This is why investors are paying more attention to ASX-listed uranium stocks.

Why Paladin is a winner 

This is positive for Paladin Energy because it is already producing uranium through its Langer Heinrich mine in Namibia. 

If global uranium demand continues to rise while supply remains tight, uranium prices could increase, allowing the uranium stock to potentially generate more revenue and profits. 

In simple terms, it benefits if uranium becomes more valuable because it is already a producer and can sell into that stronger market.

Brokers tipping big upside 

Thanks to these emerging tailwinds, brokers are tipping healthy gains over the next 12 months for this ASX uranium stock. 

It closed trading yesterday at $11.73 per share. 

The team at Canaccord Genuity has a buy call on Paladin Energy shares with a $15.80 target.

This indicates a 34% upside from current levels. 

Elsewhere, Morgans has an accumulate rating and $13.30 price target, indicating 13% upside. 

The current Patterson Lake South (PLS) resource may only represent part of the story – The mine plan supports ~9Mlbpa over nine years, yet mineralisation remains open at depth and along strike, drilling density declines materially below 350m. We expect the resource and mine life to increase materially in time. Simply simple – PLS is one of the highest-grade undeveloped uranium projects globally, but its development plan is surprisingly conventional, with a TBM decline, proven mining methods, a standard Athabasca processing flowsheet and uncomplicated tailings storage reducing technical risk.

The post Brokers are confident in the outlook for this uranium stock tipping 34% upside appeared first on The Motley Fool Australia.

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• 6 ASX shares tipped by brokers to rise 34% to 88%
• Uranium is back. Three ASX shares that give you exposure
• These are the 10 most shorted ASX shares
• 9 ASX shares downgraded by experts post-results this week

Motley Fool contributor Aaron Bell 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.

CSL Ltd (ASX: CSL) shares slipped 2% to $171.21 on Wednesday, but that hardly dents their remarkable recovery. The ASX biotech stock has surged 30% over the past month and is now up about 90% from its 11-year low of $90 in June.

By comparison, the S&P/ASX 200 Index (ASX: XJO) has lost 4% in the past month.

After such a dramatic rebound, investors are asking a simple question: how much further can CSL shares go?

Why have CSL shares soared?

The catalyst was CSL’s FY26 result. On the surface, it looked ugly, with the $80 billion biotech reporting a US$2.6 billion net loss after tax.

Investors, however, quickly looked beyond the headline figure. The loss included US$7.1 billion of pre-tax impairments and US$799 million in restructuring costs, much of which was non-cash. Most impairments related to CSL Vifor intangibles and under-utilised property, plant and equipment.

Investors had already received a warning in May, when CSL flagged around US$5 billion of impairments and cut its FY26 guidance.

Excluding exceptional items, underlying NPATA fell just 2% to US$3.1 billion. Revenue declined 1% to US$15.8 billion, but still beat analyst expectations.

The result effectively gave investors what they wanted: a reset year, a cleaner balance sheet and an outlook that wasn’t as bad as feared.

Could FY27 send CSL shares higher?

The bull case now centres on FY27.

CSL expects underlying NPAT to grow approximately 5%, ahead of consensus expectations of around 2% growth. Behring is expected to deliver mid-single-digit growth, with immunoglobulins forecast to increase at a mid-to-high single-digit rate.

The biggest challenge remains Vifor, where revenue is expected to plunge about 25% as iron generics enter the market.

Consensus estimates suggest CSL could generate earnings per share of roughly $9.00 in FY27, rising to $9.50 in FY28 and $10.10 in FY29.

At $171.21, CSL shares are valued at around 19 times forecast FY27 earnings. That’s not cheap, but it arguably looks reasonable for a global healthcare leader returning to earnings growth.

By FY29, the valuation falls to roughly 17 times forecast earnings if those estimates are achieved.

What do brokers think?

Brokers aren’t uniformly convinced the recovery has further to run. Of 19 analysts tracked by TradingView, 10 rate CSL shares a hold, while nine have a buy or strong-buy rating.

The average 12-month price target is $173.04, barely above the current share price.

There’s a huge spread between individual forecasts. The most bullish target is $206.76, implying another 21% upside. The lowest sits at $131.49, suggesting roughly 23% downside.

Macquarie is among the most cautious, with a neutral rating and target of just over $133. UBS is more optimistic at $181, while Morgan Stanley has a $172 target.

Foolish takeaway

CSL has staged an extraordinary recovery, but the easy gains may already have been made.

The business is emerging from a difficult period with a cleaner balance sheet and expectations for improving earnings. However, the broker targets suggest the market remains divided over how quickly that recovery will translate into shareholder returns.

At around 19 times FY27 earnings, CSL shares aren’t screamingly cheap. Investors buying today are effectively betting that the company’s earnings recovery will beat expectations.

If it does, there’s potentially more upside. If growth disappoints, the recent 90% rebound leaves plenty of room for the shares to fall.

The post CSL shares are up 90%. How much higher can they go? appeared first on The Motley Fool Australia.

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• How much passive income can I earn off a $550,000 superannuation balance?
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Motley Fool contributor Marc Van Dinther 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 CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superannuation has become a highly effective tool for investors to generate returns at a lower tax rate. It can be a very effective way for investors wanting passive income.

Pleasingly, superannuation has a lower tax rate than many companies, trusts and individuals. The way superannuation works also means it’s very easy to invest for the long term.

In my view, receiving passive income is one of the top benefits of owning shares. It’s really rewarding to receive passive income from owning ASX shares.

Getting paid money each year for no ongoing effort seems like a compelling arrangement to me.

One of the best benefits about superannuation is that Australians lose less of their passive income return to tax. I think it’s important to remember that it’s the after-tax passive income that investors can use.

If an Australian working full-time receives passive income in their name, they could lose a third (or more) of that dividend income to income tax, which makes the passive income return less appealing.

Following proposed taxation changes earlier this year, superannuation could be the best place to invest for passive income because of the lower tax rate in the accumulation phase of wealth building, compared to an individual owning income-paying assets as a full-time earner.

In retirement, an Australian’s superannuation tax rate could be as low as 0%. We can’t get a lower tax rate than that!

Of course, every household’s taxation situation may be different, so I’ll just look at targeting a particular dividend goal and ignore tax rates for the rest of the article.

How much is needed in superannuation for $70,000 of annual passive income?

Receiving $70,000 of annual passive income sounds great to me. I’d like to get there one day, though I’m a long way off the goal.

Australian superannuation investors should think about what sort of investments they want to own and the scale of the dividend yield of that asset.

In my opinion, ASX shares are the best choice for passive income, partly because of the great franking credits that are attached to dividends.

Based on all of the above, we can see that the required superannuation balance to earn $70,000 each year depends on the dividend yield of the portfolio.

For example, if a portfolio has a 5% dividend yield, it’d require $1.4 million, a 4% dividend yield would require $1.75 million and a 7% dividend yield would require a $1 million portfolio.

It depends on which ASX shares investors choose.

The types of ASX dividend shares I’d buy

There are lots of appealing ideas on the ASX that can deliver good dividend yields.

For example, we can choose wonderful operating companies, fantastic listed investment companies (LICs) and impressive yet discounted real estate investment trusts (REITs).

Some of the names I’d consider with low-to-medium dividend yields but with good growth and/or payout stability include L1 Long Short Fund Ltd (ASX: LSF), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES), Lovisa Holdings Ltd (ASX: LOV) and APA Group (ASX: APA).

Some of the businesses with larger dividend yields include Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1), Dexus Industria REIT (ASX: DXI), Telstra Group Ltd (ASX: TLS), Charter Hall Long WALE REIT (ASX: CLW), Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), MFF Capital Investments Ltd (ASX: MFF) and WCM Global Growth Ltd (ASX: WQG).

The post How much is needed in superannuation to target a $70,000 annual passive income? appeared first on The Motley Fool Australia.

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• Could a $1 million superannuation balance provide $50,000 a year in retirement?
• How much passive income can I earn off a $550,000 superannuation balance?
• 2 ASX shares with dividend yields above 8%
• Consumer sentiment is low. These ASX shares stand to benefit

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Hearts And Minds Investments, L1 Long Short Fund, Mff Capital Investments, Rural Funds Group, Washington H. Soul Pattinson and Company Limited, and Wcm Global Growth. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group, Mff Capital Investments, Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Lovisa and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.