On Monday, B.Riley initiated coverage on Royalty Corp (NASDAQ:UROY), a company specializing in uranium royalties, with a Buy rating and set a price target of $3.50. The firm highlighted the company’s robust portfolio, which includes 22 royalties on 19 assets, featuring prominent uranium sites such as Cigar Lake and McArthur River.
Uranium Royalty Corp currently has three of its assets in commercial production, but B.Riley anticipates significant growth for the company. According to their analysis, about half of Uranium Royalty’s portfolio is expected to generate royalties within the next five years, with a projection of 73% becoming payable within a decade.
The company’s financial position is bolstered by its holdings of 2.7 million pounds of U3O8 on its balance sheet. This stockpile is estimated to provide an additional value of around $220 million at current market prices, which equates to approximately 70% of Uranium Royalty’s market capitalization.
B.Riley’s outlook for Uranium Royalty is optimistic, with expectations that the market has yet to fully appreciate the company’s potential for long-term cash generation. Once a majority of its royalties begin to pay out, the firm believes that the company’s price to net asset value (P/NAV) of 0.68x, based on their estimates, indicates an attractive valuation for investors.
In other recent news, Uranium Royalty Corp has made a significant filing with the U.S. Securities and Exchange Commission (SEC), known as a Form 6-K. The document provides updates on material events that shareholders should be aware of. The report, intended for August 2024, will be incorporated by reference into the company’s registration statement on Form F-10, as amended. Josephine Man, the Chief Financial Officer of Uranium Royalty Corp, officially signed the filing, ensuring the company’s compliance with the SEC.
The company’s strategic investments in uranium interests, including royalties, streams, debt, and equity in uranium companies, as well as physical uranium holdings, remain the same. Notably, these recent developments do not indicate any change in the company’s business address or contact information.
InvestingPro Insights
Uranium Royalty Corp’s (NASDAQ:UROY) recent coverage initiation by B.Riley aligns with several key insights from InvestingPro. The company’s strong financial position is underscored by an InvestingPro Tip indicating that UROY holds more cash than debt on its balance sheet, which supports B.Riley’s positive outlook on the company’s growth potential.
InvestingPro data reveals that UROY has experienced a significant 35.57% price return over the last month, reflecting growing investor interest that may be tied to the company’s expanding portfolio and future royalty prospects. This aligns with B.Riley’s projection of increased royalty generation in the coming years.
Additionally, an InvestingPro Tip notes that analysts anticipate UROY will be profitable this year, which could be attributed to the company’s growing asset base and potential royalty income. The company’s market cap of $321.32 million and a price-to-book ratio of 1.59 suggest that there may still be room for valuation growth, especially if B.Riley’s projections about future royalty payments materialize.
For investors seeking a deeper understanding of UROY’s potential, InvestingPro offers 12 additional tips that could provide valuable insights into the company’s financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
