Deep Yellow paces uranium rally as Macquarie sees 2026 price lift
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The news: Deep Yellow led a rally in uranium miners as Macquarie analysts said they expect uranium term prices to continue to rise in 2026.
The numbers: Deep Yellow shares were up 6.8% at 1:37pm AEDT. Rival uranium stocks Paladin Energy (+5%) and Boss Energy (+0.4%) were also higher.
The context: Macquarie analysts said they expect term prices to increase throughout the year as utilities seek to incentivise supply.
This should bring floor pricing up with it, they said, enabling greenfield projects to proceed, including Deep Yellow's Tumas project in Namibia.
Macquarie downgraded Paladin from 'outperform' to 'neutral' given the stock's 49% rise over four months since its equity raise. It also downgraded Boss from 'neutral' to 'underperform', following its "underwhelming" Honeymoon project update in December.
However, the analysts believe developers should outperform this year with "maximum price leverage and re-rating potential" in Deep Yellow, Bannerman Energy and Lotus Resources.
Macquarie retained an 'outperform' rating for Deep Yellow and said the early commencement of new CEO Greg Field's should help keep the Tumas project on path to a final investment decision.
RBC Capital Markets analyst Alistair Rankin also noted that the December quarter "reinforced uranium's structural tightening", with term prices reaching USD86.5 ($129.11) per pound, the highest level since 2008.
However, supply-side execution risk "remained material" as restart projects underdelivered, he said.
What they said: "Looking into 2026, we expect the contracting cycle to persist as utilities address thin 2030's coverage, supporting elevated pricing," Rankin said.
"Paladin Energy remains our key preference among ASX uranium producers given its clear pathway to nameplate capacity by start of FY27 as G-pit primary ore is delivered and mining fleet commissioning completes.
"We think that supply-side execution risk should increasingly reward quality operators over aspirational production guidance."
The sources: Macquarie research, RBC Capital Markets research
