LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg slightly raised their target on uranium business Yellow Cake from 543.0p to 552.0p on Wednesday following a "timely acquisition" by the group.
Berenberg said that Yellow Cake has completed a capital raise of $75.0m, which was upscaled from $50.0m, to purchase uranium from Kazatomprom through the issuance of 15.m shares.

The German bank noted that the uranium purchase price was $48.9 per pound, a roughly 4% discount to the spot price of $51 per pound on the day of the announcement.

"We assume that $65.0m is used to acquire circa 1.3m pounds of uranium and that the remainder is used for working capital and general and administrative purposes," said Berenberg, which also highlighted that the raise was completed at £4.12 per share, a 3.6% discount to the stock's closing price of £4.27/share on 2 February.

Berenberg updated its model for the capital raise and said it believes that the uranium space remains "compelling", offering zero-carbon baseload power that it reckons will be "a key enabler of the energy transition".

"Considering the challenges of supply over demand, we think that there is upside to current prices," said the analysts, who stood by their 'buy' rating on the stock.









Reporting by Iain Gilbert at Sharecast.com

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