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Uranium stocks are the latest to grab the attention of Reddit’s WallStreetBets community, and soaring uranium futures prices have prompted Wall Street analyst to raise his triuranium octoxide price targets .
The analyst: Bank of America analyst Lawson Winder reiterated a neutral rating on Tuesday Cameco Corp (NYSE: CCJ) and raised the price target from $ 20 to $ 29.
Related link: The Case for a Stock Market Bubble: “Speculation Invades Society”
The thesis: Winder has raised its triuranium octoxide price target for 2021 by 18% to $ 36.30. He also increased his 2022 goal by 41% to $ 53.50 and his 2023 goal by 18% to $ 48.50.
Over the past month, the price of uranium futures has jumped about 40% to around $ 42.40, a high of around seven years.
In that same stretch, Cameco shares are up 47.1%, and Winder said Tuesday that rising uranium prices are already impacting Camecon’s stock price at this point.
He said the stock will likely continue to be volatile in the near term given that it is the only large liquid US stock with significant exposure to uranium.
“We believe, however, that any potential price increases in the short term would prove to be temporary. We believe our current outlook is largely reflected in stocks, ”said Winder.
Winder said the Sprott Physical Uranium Trust (OTC: SRUUF) alone, has increased global demand by about 3% since August 17. Winder said producers would certainly respond to the spike in prices by increasing the supply, but it will take a while for this new supply to come online. Meanwhile, Winder said the SRUUF fund will likely continue to trade higher.
In addition to Cameco, several over-the-counter uranium penny stocks experienced extreme volatility this week. During the last five trading days, Energie Péninsule Ltée (OTC: PENMF) equities are up 40.1%, Australia’s limited energy resources (OTC: EGARF) is up 40.2% and PLC Yellow Cake (OTC: YLLXF) shares are up 23.2%.
Benzinga’s point of view: Uranium is the latest investment even to take social media by storm, and pouring retail volume into relatively illiquid publicly traded uranium stocks has certainly created extreme short-term volatility.
Uranium prices could continue to rise in the short term until more offers are online, but traders can expect uranium stocks to eventually follow a similar longer term trajectory. to that of most short-term even low-float stock trades of 2021.
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