The uranium sector is expected to grow in the first half of 2026 due to supply security concerns, ongoing production constraints, and supportive government policy, according to a Thursday Jefferies note.

Jefferies noted that term contracting has now closed the volume shortfall and pushed the term uranium price up to $86 per pound, showing strong demand from utility buyers.

There are still short-term headwinds, including seasonal weakness and a split between spot prices and term prices, but the short-term pressures do not reflect the strength of the underlying uranium fuel cycle, the note added.

Jefferies has a buy rating on Paladin Energy (ASX:PDN) with a price target of AU$11.

Jefferies has a hold rating on Boss Energy (ASX:BOE) and Deep Yellow (ASX:DYL) with price targets of AU$2 and AU$1.65.