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Investing.com - JPMorgan has downgraded Pilbara Minerals Ltd (ASX:PLS) from Neutral to Underweight with a price target of AUD1.25.
The downgrade comes despite Pilbara Minerals beating quarterly expectations on most key metrics, with the exception of realized pricing due to lower lithia content concentrate sold.
JPMorgan noted that Pilbara’s FY26 guidance was mixed, with volumes aligning with the firm’s estimates, costs slightly higher than expected, and capital expenditure projections decreasing.
The investment bank explained that while a mark-to-market adjustment of near-term spodumene prices dampens forecast losses over FY26-FY28, its discounted cash flow-based valuation remains largely unchanged based on a long-term spodumene price assumption of $1,100 per ton.
JPMorgan cited valuation concerns as a key factor in the downgrade, noting that the stock currently trades at 1.42 times price-to-net present value following the recent sentiment rally in lithium.
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