Uranium company Energy Fuels’ target price raised by Roth Capital Partners based on stronger than expected balance sheet

Energy Fuels Inc (NYSEAMERICAN:UUUU) (TSE:EFR) got a boost Wednesday from Roth Capital Partners, which raised its target price and reiterated a Buy rating.

The firm lifted its 12-month target price for the Lakewood, Colorado, uranium company to US$4 from $3.75, saying it maintained a stronger balance sheet than Roth had estimated.

Shares of Energy Fuels traded at US$2.68 in Tuesday’s New York trading. They fetched C$3.56 in Canada.

READ: Uranium company Energy Fuels ends 2018 with US$52M of working capital

In response to a petition submitted by Energy Fuels and Ur-Energy Inc (NYSEAMERICAN:URG) (TSE:URE) in January 2018, the US Commerce Department began an investigation under Section 232 of the Trade Expansion Act into the effects of uranium imports on national security.

The remedies sought include a quota to limit imports of uranium into the US, effectively reserving 25% of the market for US uranium production. Also sought is a requirement for federal utilities and agencies to buy US uranium.

“We anticipate a resolution to the Section 232 petition by mid-July of this year and believe that a positive outcome for the uranium industry is likely,” Roth analyst Joe Reagor wrote in a research paper. “We note that management’s guidance does not appear to include an expectation one way or the other, but we believe a positive outcome could result in an increase in production and sales guidance.”

‘Pull forward’

The outlook for Energy Fuels remains positive, according to Roth.

The firm added that it was increasing its price target because of the “pull forward” of its discounted cash flow (DCF) model and Roth’s revised estimates.

While the firm’s estimates do not reflect the impact of the Section 232 petition, Reagor wrote that the firm is confident there will be a positive resolution.

Contact Dennis Fitzgerald at [email protected]

Story by ProactiveInvestors