PLS Group Ltd (ASX: PLS) shares have been strong performers over the past 12 months.
During this time, the lithium miner's shares have risen almost 300%.
Does this make it too late to invest? Let's see what analysts at Bell Potter are saying following the release of its quarterly update.
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What is the broker saying?
Bell Potter was impressed with the company's performance during the third quarter. It notes that PLS delivered production ahead of expectations with lower than expected unit costs. It said:
PLS reported record quarterly spodumene concentrate (SC) production of 232kt (BPe 213kt) and sales of 196kt at 5.2% Li2O (BPe 213kt). Reliable plant performance supported lithium recoveries of 75% (2Q FY26 76%). Unit costs were A$520/t FOB (down 11% QoQ; BPe A$568/t). In the current quarter, costs are expected to increase as Ngungaju plant restart costs are expensed.
The broker also highlights that PLS is printing cash at current lithium prices, which it expects to be used to fund shareholder returns and growth projects. It adds:
At current lithium prices, PLS is generating significant earnings and cash (3Q FY26 FCF ~$375m) to fund shareholder returns and growth. Commissioning and technical validation has commenced at its mid-stream plant supported by $38m government grant funding (ARENA) and a lithium phosphate offtake contract with Chinese cathode manufacturer Ronbay. The POSCO lithium hydroxide JV has recommenced production at moderated levels.
P2000 and Colina feasibility work is advancing. PLS' Board is assessing pre-FID capex to fast track development, along with potential multi-year investment at Pilgangoora (new accommodation and maintenance facilities; access roads) to align infrastructure with the larger operation. Clarity on the capex outlook and FY27 guidance are expected with the 4Q FY26 report in July 2026.
Are PLS shares a buy?
According to the note, the broker has retained its hold rating on PLS shares with an improved price target of $5.50.
Based on its current share price of $5.77, this implies potential downside of almost 5% for investors over the next 12 months.
Commenting on its recommendation, Bell Potter said:
We maintain our Hold recommendation. At current lithium market prices, PLS will generate substantial earnings and cash flow ahead of the restart of the 200ktpa Ngungaju processing plant. P2000 and Colina development studies are being progressed, providing substantial organic growth optionality in markets with strong underlying EV and BESS-led long term demand fundamentals.
