PLS Group shares (ASX: PLS) fell 8.07% on Friday to head into the weekend at A$2.62 today, just 1 cent above the freshly minted 52-week low. It has been a brutal selloff for a stock that had started the year so strongly, with a 56% gain through the first five months. Since June 1st, the trend has shifted firmly negative, with PLS’ share price now 61.13% lower, despite an attempt in August to arrest the slide.
A glance at the 1 year chart below highlights the shift well, with the selling pressure reaching new levels in the past eight weeks. A 50% drawdown since the start of September, and an extremely oversold RSI of just 18.4 underlines how quickly sentiment has turned against lithium names, with this year of two halves firmly negative (-39.21% YTD).
What is happening at PLS Group?
Recent operations have appeared strong, although markets are forward looking, and price what lay ahead rather than what has been.
Looking the financials for clues, Pilbara’s FY26 results showed revenue of about A$1.93 billion and underlying EBITDA near A$1.14 billion at a margin of roughly 59%, with record Pilgangoora production of about 880,000 tonnes and FOB unit operating costs around A$569 a tonne. Guidance points to higher output of 1.03 to 1.10 million tonnes in FY27, and the interim result earlier this year showed revenue up 47% with underlying EBITDA up 241%. By most operational measures, this is a large-scale, low-cost hub generating real cash.
But the market is focused on what comes next, and the lithium narrative has shifted towards oversupply risk, the rise of alternative chemistries such as sodium-ion, and recycling as longer-dated threats to demand and margins. PLS’ capital-heavy pipeline, including the P2000 expansion and downstream hydroxide and midstream phosphate projects, gives bears clear execution and funding hooks if prices stay subdued.
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The setup from here
Shifting focus to the analyst community, and the Street remains bullish on the stock, with the average price target on PLS at A$4.54, implying roughly 70% upside. This suggests that either analysts models have yet to fully refresh for lower lithium prices, or the market is overshooting to the downside.
From a technical perspective, it is hard to find words other than capitulation when looking at the charts. The RSI at 18.4 is deep in oversold territory, one of the most oversold names on the index, and the CCI at minus 107.6 confirms the downside stretch, pointing to washed-out short-term sentiment. The moving-average structure is clearly bearish, with PLS a long way below the 50-day SMA at A$4.21 and the 200-day at A$4.91. Trend-strength readings, with the ADX at 46.6 and rising indicates that sellers might not be done yet, with a close just 1 cent above the new low.
After eight consecutive negative weeks, PLS holders will be looking for the final week of October to snap the trend. We would want to see some signs of life, and support forming rather than trying to catch the proverbial falling knife here. A rising RSI, and a move back towards the 30 day SMA on strong volume would be a start, but even then, lithium sentiment needs to shift.
Bull Case:
- Record FY26 production, 59% EBITDA margin and a multi-billion dollar cash balance.
- Consensus target of A$4.54 implies roughly 70% upside from today’s close.
- Deeply oversold technicals could fuel a sharp rebound if lithium sentiment stabilises.
Bear Case:
- Lithium oversupply, alternative chemistries and recycling threaten long-term price and margin assumptions.
- Heavy capex across P2000, hydroxide and phosphate projects raises execution and funding risk.
- Strong, rising downtrend with price below all key moving averages shows sellers in control.
