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Pilbara Minerals could be set for 80% rebound, says Sydney analyst​

22nd February 2019
Resources Rising Stars​

Newly-minted lithium miner Pilbara Minerals (ASX: PLS) could offer investors an ~80 per cent return as it rebounds from a recent sector-wide price correction which has masked the strong fundamentals of the stock, according to a leading Sydney-based resource analyst.
Steuart McIntyre senior mining analyst with Sydney-based Blue Ocean Equities this week issued a somewhat contrarian call on Pilbara, which like most lithium stocks has been savaged over the past eight months.
Pilbara is down around 33 per cent from its most recent high of $1 in July last year – despite ticking pretty much every box with the construction, commissioning and ramp-up of its flagship Pilgangoora project in WA.
McIntyre was one of the first to whack eye-catching price targets on stocks like Pilbara Minerals (ASX: PLS) and Dacian Gold (ASX: DCN) – and be proven correct.
He now believes that Pilbara Minerals is now trading at a large discount to his calculated NPV for the project and, with a price of 67c is trading at a price to NPV ratio of just 0.40 times.
“We believe the discount relates to (1) fear of lithium prices falling further, (2) uncertainty relating to the Stage 1 ramp-up (CAPEX complete) and (3) uncertainty relating to the funding for the Stage 2 expansion,” he wrote in a note to investors.
“We expect risks (2) and (3) to roll off over the next 3-6 months and see potential for a re-rating.”
McIntyre has increased his price target for Pilbara Minerals to $1.20 per share (from $1.10 previously) and maintained a BUY recommendation on the stock.

This article was published 1 hour ago by RRS in their weekly newsletter.
Interesting to say the least
Chrs w2
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