PLS Group Ltd (ASX: PLS) shares are up just over 140% over the past 12 months, raising the question: Are the shares now fully valued?
The analyst team at Macquarie doesn't think so and has an outperform rating on the stock and a bullish share price target, which we'll get to shortly.
First, let's look at the lithium company's recent production report, which informed the Macquarie opinion.
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Strong performance as lithium prices rise
PLS Group last week released its June quarter report, which showed that full-year production was up 17% to 879,500 tonnes.
While that was a good result in itself, it was further compounded by a 122% increase in the realised price for its product, which in turn led to a 152% increase in sales revenue to $1.93 billion.
The company's cash on hand increased 57% over the quarter to $2.29 billion, and net cash was $1.34 billion.
PLS also said it was progressing its P2000 feasibility study, "representing the potential expansion of Pilgangoora Operation's concentrate production capacity to approximately 2.0 Mtpa'', with that study expected to be finished in the December quarter.
The company said it expected to increase its spodumene production substantially this year from the 879,500 tonnes produced in FY26.
As it said:
September Quarter 2026 production volumes are expected to be lower than the rest of FY27 as the Ngungaju plant ramps up, with the plant expected to achieve a normalised run rate within the first four months of FY27. Production volumes are then expected to remain steady for the remaining quarters of the year, supported by four scheduled maintenance shutdowns. FY27 spodumene production is guided at 1,030kt to 1,100kt, reflecting the resumption of production from the Ngungaju plant and steady state operation from the Pilgan plant.
PLS Group shares looking cheap
Macquarie said in its research note to clients that the company's fourth-quarter production was in line with consensus estimates, while actual sales were 9% better than expected.
They added:
Mining activity increased, with total material mined 22% above Visible Alpha expectations. Feed grade was stable quarter on quarter at 1.4%, while recovery improved further to 76.8%, which we view positively. We note the Ngungaju plant restarted after quarter-end, progressing to plan.
The broker said the quarterly had led to only modest changes to their valuation of the company, and hence they had left their price target steady at $6.25, compared to $4.02 currently.
PLS Group is valued at $13.38 billion.
