Macquarie, Citi take a liking to Pilbara Minerals following...

Macquarie, Citi take a liking to Pilbara Minerals following positive expansion study for Pilgangoora
23rd February 2018
Resources Rising Stars
Global investment bank Citi has upgraded its recommendation for lithium developer Pilbara Minerals (ASX: PLS) to a BUY, saying the recent retracement in the share price presents a buying opportunity.

“PLS shares are down ~35% since their peak in early January,” said Citi analyst Clarke Wilkins, “and this provides us an opportunity to upgrade the stock to Buy/High Risk rating (previous Sell/High risk) at an unchanged target price of $1.05 per share.”

“The release of the 5Mtpa Pre-Feasibility Study (PFS) is another positive step towards unlocking value at Pilgangoora operations driven by their low cost operating profile and large resource base,” he said.

The Citi note came hard on the heels of last week’s announcement by Pilbara of a positive PFS for the Stage 2 expansion at Pilgangoora – a release which also caught the eye of Macquarie analyst Ben Crowley, who said the PFS outlines a “robust expansion case for Pilgangoora”.

“A positive, although not unexpected, outcome of the PFS is a key step towards Pilgangoora’s expansion,” Crowley wrote.

Macquarie has a 12-month price target of $1.20 per share for Pilbara based on a sum-of-the-parts NPV valuation methodology.