Boss Energy extends losses on Honeymoon ramp-up delays
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The news: Boss Energy shares fell in early trading ASX, after Macquarie slashed its target price on the uranium producer due to delays to the ramp-up of its Honeymoon project in South Australia.
The numbers: Boss shares were down 3.6% to $3.93 by 11:00am AEST, and was the second-worst performing stock across the ASX 200. It ended 2.39% lower on Thursday after announcing that it was ready to start deliveries from its Honeymoon uranium project.
Macquarie retained its 'outperform' rating on the stock, but cut its 12-month target price by 17% to $5. It also lowered earnings per share forecasts by 53% for FY25 and 33% for FY26 due to a slower-than-expected ramp-up at Honeymoon.
The ramp-up is now expected to produce 0.85 million pounds (mlb) of uranium oxide in FY25, compared to 1.6mlb previously guided, and 1.63mlb in FY26, down from the previous forecast of 2.45mlb.
However, the analysts noted that a 30% downturn in share price since May "appears overdone" on the basis that Honeymoon operations were going well, ramp-up expectations were now re-based, and a recent drilling highlighted Honeymoon's expansion and extension potential.
The context: On Thursday, Boss said it would start deliveries from Honeymoon with initial production running ahead of the ramp-up schedule.
The announcement came a few months after Boss announced the first production at Honeymoon, confirming the project’s technical and operational success.
Boss Energy shares are up by a third over the past 12 months, boosted by the rising price of uranium as its popularity has grown with national governments looking for diversified solutions to meet emissions targets.
The source: Macquarie research
