Credit Suisse Lifts Uranium One rating to Outperform, Target Price to $4.20
Credit Suisse lifted its rating on Uranium One (UUU.TO) to Outperform from Neutral and its target price to $4.20 from $3.20 on a "good" second quarter result and revised tax outlook.
"UUU has previously stated that its mining operations in Kazakhstan should not be subject to Excess Profit Tax ( EPT ); however, for conservatism (and on the guidance of management), we had continued to factor this into our valuation model and considered EPT a unique and onerous burden to UUU's project cash flows. Based on new and more positive guidance, we have removed EPT from our valuation model, resulting in a 23% increase to NAV to $3.50/share (from $2.84/share). Our TP of C$4.20/share (from C$3.20) is based on a 1.2x our revised NAV of C$3.50/share. Including the minority shareholder dividend of $1.06, our total holding return exceeds 68% (35% without). Our target multiple for UUU is unchanged and in-line relative to its closest peer, Paladin Energy Ltd.," Credit Suisse said in morning note.
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