The PLS Group Ltd (ASX: PLS) share price has been an incredible performer, more than doubling in the past year, as the chart below shows.
It has been a great time to own a piece of the ASX lithium share. Now investors may be wondering whether the miner can continue surging ahead or whether it has finished rising.
Let’s take a look at what experts think the prospects are for the PLS Group share price.
Demand upgrades for lithium
In December, UBS pointed out that after a couple of years of difficult conditions for lithium miners, it is seeing positives for the lithium sector because of “ongoing supply disruptions, further anticipated disruptions to Chinese lepidolite producers (CATL) and resilient overall demand.”
In that December note, UBS increased its short-term to mid-term thoughts following an 11% increase in lithium demand, driven by batteries.
The broker can see the lithium market moving into a deficit from 2026 onwards. Based on that, it decided to lift its lithium (SC6 CFR China) forecast compared to its previous forecast by:
- 64% in 2026 to US$1,800 per tonne
- 148% in 2027 to US$2,850 per tonne
- 94% in 2028 to US$2,625 per tonne
However, the broker decided to leave its long-term incentive-based price for lithium unchanged at US$1,200 per tonne.
After that, the broker decided to revise its earnings projections for the lithium shares PLS Group, IGO Ltd (ASX: IGO) and Liontown Ltd (ASX: LTR) by upwards of 100% and it’s now forecasting free cash flow yields of up to 18%, which is a “a steep turnaround from burning cash” as recently as last quarter for some.
On the battery energy storage systems (BESS) demand side of things, UBS wrote:
The global battery team has upgraded 2025-30E global battery demand by up to 11% through to 2030e, with a 4-37% lift in BESS the main driver. On their numbers, BESS will account for ~31% (1.2TWh) of total battery demand by 2030e vs. ~20% today.
PLS Group share price target
A price target is where experts think the share price will be in 12 months from the time of the investment call.
UBS decided to hike its price target on PLS Group shares by 67% to $4 after taking the positive conditions into account.
However, despite that huge increase of the price target, it still suggests a negative return in 2026. Indeed, it implies a fall of 14% this year.
With that in mind, other ASX shares may seem more appealing at the current valuation.
The post PLS Group shares: After a year of outperformance, is it still a buy? appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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