Paladin Energy (ASX: PDN) has been on a strong run over the past few weeks.

Shares in the ASX 200 energy stock have rocketed by 28% since the start of August to reach $7.96 at the time of writing.

This compares with a 3.2% gain for the All Ordinaries Index (ASX: XAO) over the same period.

A key catalyst for this surge has been improved sentiment in the broader uranium market after the world's two largest uranium miners announced production cuts.

More specifically, Canadian outfit Cameco Corp (NYSE: CCJ) slashed the 2025 production forecast for its McArthur River mine by nearly 20%.

This followed Kazakhstan's state-owned uranium giant Kazatomprom trimming its total 2026 output target by about 10%.

In turn, reduced production from these two heavyweights could tighten global uranium supply and potentially push prices higher.

And a more favourable pricing environment may be a boon for Paladin as it ramps up production at its 75%-owned Langer Heinrich mine in Namibia.

The company is also moving its recently acquired Patterson Lake South project in Canada towards production.

Let's see what leading broker Macquarie Group Ltd (ASX: MQG) makes of Paladin's progress after the ASX 200 energy stock reported its FY25 results last week.

Macquarie's viewpoint

Macquarie noted that the Langer Heinrich mine remained cash flow negative in FY25 on the back of 2.7 million pounds of uranium sales.

However, the broker expects the mine to turn free cash flow positive in FY26 as production ramps up. This could lead to further improvements in cash flow generation in FY27.

Macquarie anticipates 4.4 million pounds of uranium production in FY26, reaching 5.5 million pounds in FY27.

It also expects Paladin to improve its contract pricing as production at Langer Heinrich accelerates.

This could be aided by a stronger uranium pricing environment in the coming year.

Separately, the broker shared its views on the undeveloped Patterson Lake South project.

As a brief background, Paladin acquired the project when it purchased Canadian outfit Fission Uranium Corp late last year.

The ASX 200 energy stock has since concluded a detailed review of Fission's feasibility study, designed to gauge the merits of bringing Patterson Lake South to production.

Here, Macquarie noted a strong economic profile for the project.

The study estimates a 28% post-tax internal rate of return (IRR) assuming a uranium price of US$90 per pound.

Paladin anticipates an initial ten-year mine life for the project with a payback period of 2.4 years.

Production at Patterson Lake South is projected to commence in 2031 following a three-year construction phase.

Macquarie's final verdict

All up, Macquarie believes Paladin shares could have more fuel left in the tank.

The broker placed an outperform rating on the ASX 200 energy stock with a 12-month target price of $8.40 per share.

This equates to 5.5% upside potential from $7.96 per share at the time of writing.