According to the financials of BHP and RIO, the average PE is double what you state. Can you provide the information to substantiate what the average PE is over a number of years, not just an outlier.
Here is what I found.
BHP
RIO
FMG
AS can be seen, the big diversified miners have average PE's in the teens. FMG is a one trick pony so it has big swings in PE as the price of the commoditised Fe performs it's cycles but even with that being the case, it's average PE is 8 over the last 9 years of figures above.
Now before you state PLS is a one trick pony, consider the facts that we already know. Prices for Li have a very high probability of staying high for longer. Not even going to discuss this point anymore as every respected Lithium analyst has indicated this.
PLS has already entered into JV's to produce downstream value added product, either Hydroxide or their own midstream Lithium (probably phosphate) salt. This will insulate them from any future loss of margin to the converter. For the foreseeable future, the margin will stay with the miners. Not my opinion. This is the opinion of all across the industry.
The incumbent hard rock producers are the ones best placed to meet the exponentially increasing demand. They have the IP and financial capacity to bring new capacity online quicker than anyone else. I won't even go into the other generational energy disruption factors that justify higher PE's.
Basing prices on low PE's is exactly why mainstream missed the boat and is now scrambling to get on board. Lithium heavy weights like ALB and SQM have much higher PE's and this is why OS funds are buying Aussie Lithium stocks like AKE and PLS. They know these low PE's ratios and associated SP valuations are way short of the mark.
You also believe prices will fall to between the 2-3k range next year so obviously quoting a CS, GS or MS report. You state it like it's definitely going to happen. Please show your supply/demand figures to justify Lithium falling to these levels. They may well go back to those levels at some stage in the future if demand drops and a miraculous thing happens like all forecast supply comes on line with no project delays and all production reaches nameplate. Very very unlikely and history shows this to be the case.
Anyway I see you are a holder, a late comer as you are new to posting here. If you don't believe that higher valuations are possible, why invest in PLS. A poster of your caliber surely has better options available to invest in as you seem to rate your analysis enough to post negative views about the analysis of a respected LT holder and poster. A poster I might add that invested in PLS long before you because they DTOR and backed it up with cash early.
Another case of a green eyed latecomer to the party I suggest folks. Dirty on the world as many of this posters investments are in the toilet. APX ridden this one all the way down I see.
Check out previous posts folks. This poster offers no opinions that should be taken notice of.
As for taking on
@nathanwoly, well good luck with that. Woly's posts here speak for themselves. Woly's charting TA has always offered great probability analysis with upside and downside targets given, and his FA also very insightful.
@Navb I can only suggest you consult Woly before you make anymore disastrous investing errors like APX. Good luck as you appear to be one of the Noobs you refer to in an above post.
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