What happened?
The shares of Energy Fuels (TSX: EFR)(NASDAQ: CLNE) staged a sharp recovery Thursday morning after consistently falling in the previous four sessions. At the time of writing, ERF stock was trading with nearly 15% advances for the day at $12.09 per share. Today’s rally helped EFR stock extend its year-to-date gains to more than 25% against a 2% rise in the TSX Composite Index in 2022 so far.
So what?
Energy Fuels is a Lakewood-based uranium mining company with a market cap of about $1.7 billion. Today’s sharp gains in EFR stock came after a New York-based equity research and investment firm H.C. Wainwright raised its target price on the stock from $8.50 to $9.75 per share. While its new target price was already 7% lower than Energy Fuels stock’s last closing price of $10.53 per share, the upgrade still seemingly boosted investors’ confidence.
Consistently rising uranium prices amid the ongoing Russia-Ukraine war could be another reason for today’s sharp rally in Energy Fuels stock.
Now what?
In 2021, Energy Fuels reported a solid 92% year-over-year increase in its total revenue to US$3.18 million. However, its latest annual revenue figure fell short of Street analysts’ consensus estimate of around US$4.88 million. In its latest earnings report released earlier this week, it mentioned that “while the company chose to not sell any uranium during 2021, it is now actively engaged in pursuing selective long-term uranium sales contracts.” Given that, I expect Energy Fuels to report much stronger financial growth in the coming years.
As I noted above, the recent Russian invasion of Ukraine has triggered a sharp rally in uranium prices, because Russia is one of the major suppliers of uranium and nuclear fuel to the U.S. and Europe. A stronger price environment could boost Energy Fuels’s margins in the near term and keep its stock soaring.
