In an Aug. 7 research report, Eight Capital analyst David Talbot announced an increase in the target price for Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American), from CA$3.85per share to CA$5.40per share. Energy Fuels' shares are currently trading around CA$4.21.
The increase was predicated on "higher long-term V205 prices of $12/lb (up from $6/lb), assuming 4MM lbs of V205 production over the next three years at 50% margins, and increased U3O8 throughput from processing of alternate feed, pond returns, and toll milling fees," the analyst wrote.
Noting that Energy Fuels "continues to outperform its peers," Talbot detailed elements of what he considered a "banner quarter," including delivery of 500,000 pounds of U3O8 at an average price of $53.55 per pound, which beat Eight Capital's forecast. "Cushioned by high priced contracts, EFR was also able to scale back production and reduce operating costs," Talbot added.
The analyst also commented on the fact that Energy Fuels' stock has rallied, noting his firm's belief the rally was spurred by "an upturn in the uranium market, lower operating costs, significant production optimization ability, additions made to its balance sheet, and plans to produce vanadium over the next three years." Energy Fuels operates White Mesa, which Talbot states is "the only vanadium-capable mill in the USA while prices continue to rally in the face of a vanadium flow-battery revolution."
"We continue to recommend Energy Fuels as a Buy," Talbot wrote.
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Disclosures from Eight Capital, Energy Fuels Inc., Target Revision, August 7, 2018
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