Uranium Miners Analyst Watch: March Edition

by: Itinerant


Share prices and price targets have continued their rise during the past month while the uranium price has barely budged.

Ur-Energy and Energy Fuels continue to be favored by analysts and investors alike.

Recommendation rating for Cameco has been cut despite upgrades in price targets and impressive share price performance.

Concluding a full year cycle of monitoring analyst data for uranium miners we are pleased to provide our update for the month of March. As always in this series, our article summarizes current price targets and recommendations issued by analysts and makes comparisons with data reported a month ago in our February edition.

Unchanged from last month we are considering the following companies in alphabetical order for this update: Cameco (NYSE:CCJ), Denison Mines (NYSEMKT:DNN), Energy Fuels (NYSEMKT:UUUU), Energy Resources of Australia (OTCPK:EGRAF), Fission Uranium (OTCQX:FCUUF), Paladin Energy (OTCPK:PALAF), UEX Corp (OTCPK:UEXCF), Uranerz (NYSEMKT:URZ), Uranium Energy (NYSEMKT:UEC), Uranium Resources (NASDAQ:URRE) and Ur-Energy (NYSEMKT:URG).

We duly note that we source our data exclusively from Yahoo.com. Most companies considered for this article are covered by more analysts than reported in our table, but not all of them provide their data to our source website.

The table below summarizes our data. Grey columns represent data sourced directly from Yahoo.com, and light green colored columns represent processed data derived from this source data.

The first three columns list the company names, ticker symbols and share prices at the time of writing, followed by the change in share price since the last edition.

Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data to Yahoo.com and the mean recommendations given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

The remaining columns list data points computed as percentages of the share prices at the time of writing as given in the third column. The column titled "median-price" gives the differences between the share prices and the median target prices. The column titled "high-low" gives the differences between the high and the low targets. The last four columns titled "target change" document the changes in price targets since the February report, with the last column giving the average changes over the low, median and high price targets.

N.B.: At present there is only data from one single analyst available on Yahoo.com for Uranium Resource and Energy Fuels; and unfortunately no analyst data at all was available this month for Fission Uranium.

N.B. Price targets for Energy Fuels, Fission Uranium, UEX Corp and Paladin Energy are given in Canadian Dollars and we have used a conversion rate of 0.89 for this report.

N.B. Price targets for Energy Resources of Australia are given in Australian Dollars and we have used a conversion rate of 0.91 for this report.

The first chart below illustrates the share price performance since last month's edition. On average share prices have increased by a healthy 14.4% across our watch list. Fission Uranium (+34.9%) and Energy Resources of Australia (30.3%) lead the charge, and only two companies recorded moderate losses in their respective share prices, namely Uranium Energy (-4.9%) and Paladin Energy (-2.1%).

The difference between the current share price and the median price target is listed in column "median-price". Under normal circumstances we would view a large value in this column as an indicator for the potential of disproportionate gains over the coming year.

Even after the substantial rise since the start of this year we note that price targets for Energy Fuels continue to indicate the greatest potential by quite some margin. The median price target indicates 58% upside for this company. Uranium Energy is ranking a close second in this chart trading 55% below the median price target. The right hand side of this chart consists of Denison Mines trading smack on the median price target and Energy Resources of Australia has overshot the median price target by 5% on no news.

The results from column "high-low" in the table above are visualized in the next diagram. These values can be interpreted as a measure for divergence in analyst opinion.

The greatest spread in price targets was recorded for Uranium Energy closely followed by Paladin Energy.

On average price targets have increased by 4.5% during the past month. Targets for UR-Energy were lifted by 26.8% and targets for Uranium Resources were lowered by -15%.

Unchanged from last month Ur-Energy is seen most favorably by analysts at present in terms of buy recommendations as documented in column "Recommendation" and the diagram below. (We are not putting much weight on the recommendation of 1.0 currently issued for Energy Fuels by the only remaining analyst currently rating this company on Yahoo.com.)

Despite the large share price move over the last month the rating for Energy Resources of Australia continues to drop. Interestingly, recommendation ratings have also deteriorated for Cameco despite the respectable recent share price movement.

Parting Shot

Uranium Miners continue to show strength since the start of the year, while the uranium price remains stuck around the $35/lb mark. We have been taking encouragement from this apparent divergence, but we are starting to wonder how long uranium miners can sustain their rally without the uranium price following.

Disclosure: I am long URZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.