Analysts raise uranium targets as producers show signs of life

One year after Japan’s Fukushima nuclear crisis, analysts are hiking ratings and value targets on uranium companies that have posted a few impressive gains of late.In Canada, Uranium One Inc. shares are up 37% year to date and Cameco Corp.’s include climbed 14%. 

The gains are mainly notable because both stocks recently pulled back along with other global equities on resurgent fears about the eurozone.“We view this pullback as attractive entry points as we don’t believe moreover stock is accurately reflecting the significant increase in uranium prices we are forecasting,” said Tyler Langton, an analyst at JPMorgan.Stronger predicted uranium prices are the major driver behind the improved performance of uranium companies this year.

 Uranium has a current spot price of US$52 a pound, but JPMorgan forecasts that can rise to US$80 by 2014 as supply deficits catch up with demand.Uranium prices are still down 20% from the start of 2011 since of negative sentiment about the industry. The negativity reached a peak in March 2011 when Japan struggled to rein in four unstable reactors whose cooling systems were injured during a magnitude 9.0 earthquake.

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