PLS has come under selling pressure after last week’s disappointing earnings report which saw rising costs and a substantial increase in capex leaving many analysts cautious – struggles with costs has been an ongoing issue with many Australian miners through the current reporting period. The miner is operationally ahead of its peers with a Tier 1 asset and $3.4bn of cash on its balance sheet giving room for a special dividend &/or buybacks. Hence after its recent -20% correction we believe the risk/reward has returned for the buyers but we must remain conscious as we touched on earlier this is a volatile space and analysts are currently lukewarm at best.
- We like PLS in the $4-$4.50 region but 5-10% swings should be acknowledged as day-to-day noise.
MM is cautiously bullish PLS around $4.50
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