It has been a rollercoaster ride for PLS Group Ltd (ASX: PLS) shareholders in 2026.
The lithium-tantalum producer saw its share price open the year at around $4.30 per share.
After a strong run for lithium shares amid renewed sector optimism, the share price hit over $6.70.
Investors' happiness was short-lived, however, as the share price quickly plummeted back to $4 per share within weeks.
Since then, it has slowly climbed back into the positive, before PLS shares roared back to life yesterday following full-year results.
This volatility can make it difficult for investors to pinpoint true value.
However, the team at Bell Potter have provided updated guidance for what investors can expect over the next 12 months.
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What did PLS report?
As reported by The Motley Fool yesterday, the company reported FY26 revenue up 152% to $1.93 billion and a shift to a $526 million net profit.
Other results included:
- Underlying EBITDA: $1,137 million (59% margin; up from $97 million in FY25)
- Net profit after tax: $526 million (from a $196 million loss in FY25)
- Production: 879.5k tonnes spodumene concentrate (up 17%)
- Final dividend: 5 cents per share, fully franked ($161 million distribution)
- Cash balance: $2,290 million (up 135%).
Investors were seemingly pleased with these results as PLS shares rose by almost 8% yesterday.
Its share price is now up more than 150% in the last 12 months.
What is Bell Potter's view?
The broker saw the FY26 result as broadly in line with expectations, with strong cash generation and a better-than-expected 5c fully franked dividend.
However, PLS is now entering a large investment cycle, with FY27 capex expected to rise significantly as it progresses projects.
Bell Potter expects the P2000 project could receive investment approval in late 2026, but estimates its cost at around $2.2bn, well above the earlier $1.2bn estimate.
While PLS has a strong balance sheet with $1.1bn net cash, Bell Potter believes the increased spending and PLS's conservative approach to its balance sheet could limit shareholder returns in the medium term, despite only modest changes to its earnings forecasts.
Hold recommendation for PLS shares
Based on this guidance, the broker has a hold recommendation on PLS shares.
The broker also has a price target of $5.20 on PLS shares, indicating a 5% downside from current levels.
With the material step up in expenditure and the company's track record for balance sheet conservatism, we believe shareholder returns could be constrained across the medium term.
