The PLS Group Ltd (ASX: PLS) share price has delivered great returns over the past year, rising by approximately 120%, as the chart below shows. Broker UBS doesn't think the ASX lithium share is finished rising yet.
The business recently reported its FY26 half-year result, which included 47% revenue growth to $624 million and net profit growth of 147% to $33 million. The numbers themselves were very good and UBS is optimistic about the company's future.
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Very positive outlook
UBS noted that many of the company's financials had already been released, so there were no surprises and the numbers were as expected.
The broker highlighted that PLS Group did approve the restart of Ngungaju from July, as well as committing to delivering a feasibility study for the P2000 brownfields expansion in the quarter for the three months to December 2026 and for Colina (a project in Brazil) in the quarter of the three months to December 2027.
The FY26 guidance is between 820kt to 870kt, with UBS forecasting that PLS Group can achieve 875kt and then reach approximately 1.1mt in FY27 thanks to the addition of Ngangaju.
UBS forecasts that Pilgan can reach 2mt per year of production from FY30 and potentially higher in the early years.
In terms of Colina, UBS said that the diversification offered by a second operation in a different jurisdiction is a "key consideration". The broker noted that PLS Group is taking its time to incorporate additional drilling and project optimisation work due to the risks associated with a greenfield development.
As part of that (regarding Colina), UBS said that it suspects the ASX lithium share is "is keen to deploy its processing (flotation) expertise in optimising the project." This may lead to a larger project than what UBS is currently modelling (which is around 500kt per year) from FY32.
Is the PLS Group share price a buy?
UBS certainly thinks so. The broker has a buy rating with a price target of $4.95, suggesting a possible rise of more than 10% over the next year.
The broker commented:
While spodumene pricing has recovered to ~US$2,000/t already, we are bullish demand (BESS) and agree with PLS that the supply response takes time. We can see prices moving even higher from here and model a price 2x consensus a year from now. Continued strength in the price could see attention focus once again on long term assumptions which may have been cut too hard during last down cycle.
