PLS’s 2QFY25 result was strong with spodumene sales 5% higher and operating costs 5% lower than we had expected. Realised prices were a key highlight, coming in 16% ahead of our estimates. PLS indicated that the completion of a legacy offtake and adjustments to some of the current agreements have better aligned realised prices with benchmark. We had previously assumed some discounting vs benchmark in our forecasts, and removing these drives material upgrades to our earnings outlook for PLS. The P1000 project is now 95% complete and PLS should start to generate stronger cash flow once capital expenditure reduces. The improved earnings outlook drives an 8% lift in our price target to A$3.90 and we reiterate our BUY rating on PLS.
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