PLS’s operational performance in the 4QFY24 was strong with production 35% higher than we had expected, which drove a 10% beat in unit costs. However, this was partially offset by lower realised prices, which were 16% weaker than we had anticipated. Guidance for FY25 was mixed with higher volumes offset by higher costs. We have downgraded our medium-term earnings outlook to incorporate cost trends implied by the FY25 guidance and an increase in our price discount assumption vs our benchmark spodumene price forecasts. We reiterate our BUY rating but lower our price target 14% to A$3.80 due to the weaker earnings outlook and softer spot spodumene prices.
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