September quarter production was weak, curtailed to meet soft customer demand and limit the cash burn. The company achieved structural cost reductions and is targeting a reduction in quarterly costs of $5-10m.
December quarter sales have been downgraded to 35-70,000t, with Credit Suisse suggesting the lower end reflects firm orders.
The broker suspects the industry is yet to reach an inflection point in converter demand and this should be a leading indicator for lithium price stabilisation.
Outperform rating and $0.60 target maintained.
Sector: Materials.
Target price is $0.60.Current Price is $0.30. Difference: $0.30 – (brackets indicate current price is over target). If PLS meets the Credit Suisse target it will return approximately 50% (excluding dividends, fees and charges – negative figures indicate an expected loss).
