PLS plunged the most in three years on Monday as the “weak trading longs” abandoned ship. Short term further downside wouldn’t surprise but after its sharp ~15% pullback we can see buyers eyeing value in PLS and starting to buy into further weakness, assuming of course the underlying lithium price doesn’t tank too much further. PLS is battling higher costs, but it’s actively optimising operations to hit long-term guidance of ~$600/t via improved efficiencies, leaving plenty of meat in the sandwich if lithium can enjoy further strength. Almost 15% of stock is held short, meaning there remains room for a further squeeze on the upside.
- We believe PLS is now in an “accumulation zone” as it tests below $1.70.
MM is cautiously bullish towards PLS around $1.70
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