Paladin Energy shares rally as analysts retain ratings
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The news: Paladin Energy shares rallied on the ASX after analysts called Tuesday's sell-off on the uranium producer "outsized".
The numbers: Paladin shares were up 6.7% to $7.34 by 12:05pm AEDT.
Its shares closed 28.9% lower on Tuesday after the uranium miner slashed its full-year production guidance and withdrew all other guidance, amid ramp-up challenges at its Langer Heinrich mine in Namibia.
The context: Morgan Stanley analysts called the share price reaction on Tuesday "outsized", given pre-existing market expectations of a slower ramp up at Langer Heinrich. Morgan Stanley retained its 'oveweight' rating and $12.30 price target on Paladin.
Meanwhile, Citi analysts reiterated its bullish long-term outlook on uranium, and flagged that US President-elect Donald Trump could neutralise prices with potential easing of Russian supplies into Western markets.
However, short-term price downgrades, combined with lower volumes and higher costs, saw Citi slash Paladin's EBITDA forecasts by 41% in FY25 and 17% in FY26. Citi also lowered its target price from $14.60 to $11.50 but maintained its 'buy' rating.
The sources: Morgan Stanley research, Citi research
