Piedmont Lithium Stock is Excessively Oversold

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FILE PHOTO: FILE PHOTO: A Specialist trader watches his chart while working on the floor of the New York Stock Exchange

Don’t write off Piedmont Lithium (PLL).

The other day, the PLL stock dropped $15.43.  All after it announced plans to raise cash by selling about 1.8 million American Depositary Shares (ADRs) at $70.

With the stock up more than 1,000% over the last year, it’s a good move that should not have resulted in such a vicious pullback.  From a current price of $69.64, it could run back to $90, especially with the lithium and EV stories still red hot.

Remember, as Piedmont Lithium CEO Keith Phillips has said lithium supply will struggle to keep up with demand, “and steps will need to be taken to incentivize additional production and exploration of the battery metal,” as noted by S&P Global Platts.  “When people talk about 20% EV penetration by 2025, there might be a zero chance that could happen because there is no way the raw material supply will be ready,” he added.

In addition, by 2026, David Merriman, an expert on EV and battery materials at Roskill, as noted by The Northern Miner, global demand is “expected to exceed one million tonnes.”

“To meet this increasing demand for lithium products, which is more than double that expected this year, we would need to see not just an expansion in output from existing producers but also new producers looking to commission new capacity,” added Merriman. “This will require significant new investment in the industry.”