...prices of SC (Spod) that PLS received on average across H2 FY24 is certainly above the current $775/T price as SC is now trading at the lows, so it could probably mean that PLS is on the brink of operating close to a loss if not a loss.
Bell Potter had PLS 2025 NPAT at $193m based on SC at $1200, which I think is a big ask now. Even at this level, PLS would be trading at about 46x PE.
If we annualised PLS 2H NPAT to $74m (i.e 2x$37m), at a market cap near $9B, that is a PE of 120x!!
...as I had cautioned months ago, ASX lithium majors have ways to go on the downside to be appropriately valued to earnings multiple aligned to US peers (which are single digits for some).
...a $2.895B valuation based on Bell Potters $193m NPAT x PE of 15x would give an indicative price target of $0.96 (a hefty -67% downside) BUT based on my X-mas theory, it is likely to retrace to $2.10, then we see where it goes.
...if PLS faces this daunting prospect, which led it to secure a debt facility to tie it through winter, the reckoning is ahead for LTR which is unlikely to be able to produce at a profit or only at marginal profits.
