LONDON (ShareCast) - (Sharecast News) - Analysts at Bank of America revised their target price for shares of uranium investment company Yellow Cake higher.
In their opinion, both uranium and nuclear power had a role to play in solving the twin riddles of decarbonisation and energy security.

They estimated that the price of uranium would hit $75 per pound by the third quarter of 2024.

Yellow Cake did not mine or process the ore, rather it simply raised equity with which to finance purchases of physical uranium which it then held, giving investors exposure to price movements in the commodity.

Other potential positives for the investment case included uranium's low correlation with other commodities, the potential for purchases from financial buyers in the spot market and expectations that supply growth would remain constrained.

China's drive to increase its nuclear power capacity was another key element with Beijing looking to build 150 new reactors by 2035.

"Nuclear power plants tend to have relatively low operating costs once built = limited demand destruction from higher uranium prices," BofA added.

The target price for the shares was upped from 570.0p to 620.0p with their recommendation for the same was kept at 'buy'.

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