I like its target better. GLTA



Paladin Energy Ltd.

Poised For A Turn In The Market

? Trading at 0.76x NAV compared to CCO at 1.4x NAV, we believe that, with continued production stability, more investors will step into this name for its leverage to rising uranium prices in the latter half of 2013. At these levels, PDN offers a higher-risk, higher-reward way to play uranium.

? We expect the next few quarters to be basically break even on a free cash flow basis. Trends of increasing quarterly production (+14% Q/Q) and lowering cash costs (-7% Q/Q) and maintaining its cash balance of ~$100MM should continue to improve sentiment with investors.

? CQ4 adjusted EPS were ($0.02) compared to consensus of ($0.01) and our estimate of $0.02. Higher-than-expected cost of goods sold and corporate expenses explain the miss on our numbers. CFPS was also below expectation, at ($0.01), compared to our expectation of $0.05.

? We have reduced our earnings expectations for the remainder of F2013 (ending June 30) but look to F2014 for big improvements to earnings and cash flow predicated on a positive run in uranium prices. Our PT remains unchanged at $3.50; our rating remains Sector Outperformer