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On Wednesday, Stifel Canada initiated coverage on NAC Kazatomprom (LON:KAPq) JSC (KAP:LI), the world’s largest producer of uranium, with a Buy rating and a price target of $50.00. The research firm’s analysts highlighted the company’s position as a market leader and its potential for growth in contracted volumes with utilities.
Stifel analysts noted several factors currently affecting the industry, such as the availability of sulphuric acid, which impacts supply chains and production rates. They also mentioned challenges related to construction delays in wellfield development and the potential effects on 2025 production guidance due to a temporary production suspension at JV Inkai. Additionally, the introduction of the Mineral Extraction Tax (MET) was acknowledged as a new factor for the company.
Despite these challenges, Stifel Canada remains optimistic about Kazatomprom’s prospects. The analysts believe that the company’s stock offers an attractive risk-to-reward ratio when considering its relative valuation against historical ranges. They also see supportive trends in their forecasts for uranium spot and term prices.
The Stifel analysts further suggested that Kazatomprom could provide significant dividends in 2025 and 2026, bolstering the investment case for the company. The firm’s initiation of coverage with a Buy rating reflects their confidence in the company’s ability to navigate through industry challenges and capitalize on its market-leading position.
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