The Pilbara Minerals (ASX:PLS) share price is down 6% today. Is it a buy?

Is today’s weakness in the Pilbara Minerals share price a buying opportunity?

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It has been a poor day of trade for the Pilbara Minerals Ltd (ASX: PLS) share price on Monday.

In afternoon trade, the lithium producer’s shares are down 6.5% to $2.14.

Despite this, Pilbara Minerals’ shares are still up 145% in 2021.

Why is the Pilbara Minerals share price sinking?

The decline in the Pilbara Minerals share price on Monday has been driven by broad market weakness.

That broad market weakness means the Australian share market is a sea of red today, with almost all sectors recording declines.

Concerns over the Chinese economy appear to be weighing on investor sentiment. This follows reports that Chinese property giant Evergrande could collapse with US$300 billion worth of debts.

The lithium sector has been hit particularly hard, potentially due to profit taking after some very strong gains this year.

Is this a buying opportunity for investors?

One leading broker that is likely to see the pullback in the Pilbara Minerals share price as a buying opportunity is Macquarie Group Ltd (ASX: MQG).

This morning the broker retained its outperform rating and lifted its price target on the company’s shares by 7.4% to $2.90.

Based on the current Pilbara Minerals share price, this implies potential upside of almost 36% over the next 12 months.

Macquarie made the move after upgrading its near term lithium forecasts to reflect recent strong rises in China. This led to a further upgrade to its earnings estimates for the company.

What else did the broker say?

In addition to Pilbara Minerals, the broker is bullish on rival Liontown Resources Limited (ASX: LTR). This morning Macquarie held firm with its outperform rating and lifted its price target on Liontown Resources’ shares to $1.70.

The broker is very positive on the potential of the company’s Kathleen Valley Lithium Project. It believes it has the potential to produce 700,000tpa of spodumene.

Should you invest $1,000 in Pilbara Minerals right now?

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Motley Fool contributor James Mickleboro 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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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