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Investing.com - Jefferies downgraded Boss Energy Ltd (ASX:BOE) from Buy to Hold while lowering its price target to AUD5.00 from AUD5.40, citing limited near-term upside after a period of sector outperformance.
The uranium producer has successfully met its FY25 production guidance and declared commercial production at its Honeymoon project, according to Jefferies. The firm expects FY26 output to align with the Economic Feasibility Study (EFS) rather than exceed previous projections.
While second-half FY25 operating costs are tracking toward the low end of guidance, they remain elevated compared to life-of-mine EFS assumptions due to ongoing ramp-up activities. Jefferies has revised its FY26 assumptions, reducing production estimates by 10% and increasing unit cost projections by 23%.
Jefferies maintains that Boss Energy’s medium-term outlook remains fundamentally strong, with the company on track to become a ~3 million pound per year uranium producer by decade-end. This production will come from Honeymoon (~2.45 million pounds) and its 30% stake in Alta Mesa (~0.45 million pounds) across two jurisdictions.
The firm believes Boss Energy’s current valuation already captures much of its organic growth potential and the improving market backdrop for uranium. Jefferies notes that near-term upside appears more correlated to uranium price movements than company-specific catalysts, which it expects to be limited.
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