RBC Capital Markets has named Paladin Energy as its preferred Australian uranium producer as the December quarter reporting season approaches. Analyst Alistair Rankin highlighted the structural tightening within uranium markets, which is bolstering valuations. Long-term contract prices have climbed to $US86.50 per pound, marking the highest level since 2008.
Paladin Energy stands out due to its clear trajectory towards nameplate capacity by the start of FY27, facilitated by the delivery of G-pit primary ore and the completion of mining fleet commissioning. According to Rankin, quality operators will be increasingly rewarded over those providing only aspirational production guidance, as supply-side execution risks decrease. Paladin Energy is focused on uranium production and exploration, aiming to provide a vital energy source to combat climate change. Boss Energy is also involved in uranium development, striving to become a global supplier in the sector.
RBC anticipates Paladin’s 2Q FY26 production to reach 1.042 million pounds, with sales expected to be robust at 1.5 million pounds. The FY26 production guidance remains steady at 4.4 million pounds. The cost of production is projected at $US45.40 per pound, while realised pricing should be around $US70.80 per pound, resulting in sales revenue of $US109 million. For Boss Energy, RBC forecasts 2Q FY26 Honeymoon production of 450,000 pounds but acknowledged short-term uncertainty related to the East Kalkaroo well field transitions and withdrawn feasibility studies.
Reflecting stronger December quarter sales volumes and higher peer multiples, RBC has increased Paladin’s share price target by 12 per cent to $9.50, which also lifts FY26 EPS to $US0.07 per share from a prior loss of $US0.06 per share. Market reaction saw shares in Boss Energy increase by 3.2 per cent, Paladin by 5.9 per cent, and Deep Yellow by 8.5 per cent.
