Uranium is hot! Analysts have taken notice, and the interest in uranium-related stocks has been incendiary. Energy Fuels Inc. (NYSE American:UUUU), a leading U.S.-based uranium and rare earth minerals company, is a prime recipient of that heightened attention.
During the recent UN Climate Change Conference (COP28), 22 countries signed a pact recognizing the critical role nuclear energy will play in achieving global net-zero greenhouse gas emissions by 2050 and committed to tripling their nuclear power capacity. The U.S., Canada, France, Japan, and the United Kingdom announced plans to collectively mobilize $4.2 billion to develop atomic energy supply chains.
What’s Fueling Interest in UUUU Stock?
Headquartered in Lakewood, Colorado, Energy Fuels, Inc. is a mining development company and leading producer of uranium in the United States. The company engages in the exploration, mining, and processing of uranium and rare earth elements.
The recent increase in demand for uranium has been complicated by the fact that much of the world supply comes from places like Russia and Kazakhstan. While the U.S. has extensive in-ground uranium resources, much of the industrial infrastructure has sat idle, allowing it to atrophy. Save for one bright spot – Energy Fuels has accounted for two-thirds of all domestic uranium production since 2017 and has the U.S.’s only operable conventional uranium mill.
Roth MKM analyst Joe Reagor recently raised the firm’s price target to $10.50 from $9.25 and reiterated a Buy rating on UUUU shares, citing the company’s position to capitalize on higher uranium price forecasts for 2024 and 2025 and strong tailwinds.
Energy Fuels is also poised to benefit from the increasing demand for rare earth elements necessary to facilitate electric vehicles (EVs) and artificial intelligence (AI) computing. Both the U.S. and European countries are increasingly focusing on the security of the supply chain and reducing reliance on China. With the only existing facility in North America licensed and capable of processing certain rare earth elements (such as monazite), Energy Fuels is uniquely positioned to fill the gap in the U.S.
Though the interest in the company has been high, it has not yet translated into an upward trajectory in the stock price. In fact, the share price is down a little over 1% year-to-date.
Is Energy Fuels Stock a Good Buy?
Energy Fuels is rated a Strong Buy based on the ratings from four Wall Street analysts who have reviewed the stock in the past three months. Their average price target is $10.78, with a high forecast of $12.97 and a low forecast of $9.63. The average price target represents a 66.36% upside potential from current levels.
Wrap Up
With a strong position in the U.S. uranium production and the only facility capable of processing certain essential rare earth elements in North America, analysts believe Energy Fuels Inc. stands to benefit from the growing global demand for uranium and rare earth elements. Although the stock’s value has yet to reflect the amplified interest in the company, analysts are highly optimistic about its prospects as the world turns to EVs, AI, and clean energy technologies to combat climate change.
