PLL General Discussion, page-944

Macquarie rates PLL as Initiation of coverage with Outperform (1) -
Macquarie initiates coverage on Piedmont Lithium with an Outperform rating and $2.10 target price after the company announced it would take a 25% stake in Sayona Quebec, which the broker expects will generate US$1bn in cash flow over the next four years.

Macquarie says the deal sharply diversifies the company's growth outlook. Sayona Quebec is expected to process the spodumene onsite to lithium carbonate from 2027, and Piedmont Lithium has negotiated the rights to long-term surplus production. The broker expects the company will be able to use the cash to fund a lithium hydroxide refinery in Tennessee.

In the near term, the project's spodumene has received offtake commitments from Tesla and LG Chem.

Add to these projects the lithium hydroxide project in North Carolina, the company's 50% stake in Ewoyaa in Ghana, and the broker spies a long runway for growth.

Target price is $2.10 Current Price is $0.92 Difference: $1.18