The last 12 months has been very strong for the Pilbara Minerals Ltd (ASX: PLS) share price. In 2021 to date, shares of the lithium miner have risen by more than 210%.
Pilbara has benefited from a strong increase in the lithium price and demand is expected to continue to rise over the coming years.
What is the analyst outlook for the Pilbara Minerals share price in 2022?
Brokers are pretty mixed on the business.
On the one hand there is a broker like Macquarie Group Ltd (ASX: MQG) which thinks that Pilbara Minerals is a buy, with a price target of $3.70. That's around 35% higher than where it is today.
Macquarie thinks that lithium prices will continue to remain strong into 2022 and this will help the company's earnings. The broker thinks earnings will be stronger in the next few years thanks to that strong commodity price.
According to Macquarie, the Pilbara Minerals share price is valued at 9x FY23's estimated earnings.
However, there are also some analysts that are not so confident on the business.
For example, Credit Suisse actually has a sell/underperform rating on the lithium miner.
Credit Suisse's price target on Pilbara Minerals is just $2.05. That implies that the share price could drop by more than 20% over the next 12 months.
This broker doesn't think that the lithium miner is going to earn as much in FY22 or FY23, compared to Macquarie's forecast.
Looking at Credit Suisse's numbers, the Pilbara Minerals share price is valued at 29x FY23's estimated earnings.
What's happening with the lithium price?
Pilbara Minerals says that the lithium market conditions remain very strong, with high demand and constrained supply leading to record product pricing, which is still "trending higher".
The lithium miner said that the average price received in the three months to December 2021 was expected to be at the high end of the prior guidance (being US$1,650 to US$1,800 per dmt).
However, this quarter and FY22 annual concentrate production and shipping guidance has been revised due to delays with commissioning, ramp-up initiatives and extended plant shutdowns (both planned and un-planned) at both processing plants.
There has been an industry-wide shortage of skilled personnel in construction production and maintenance roles currently being experienced across the WA resource sector.
The production for the three months to December 2021 has been revised to 85kt to 95kt of spodumene concentrate, when it was previously 90kt to 115kt. FY22 shipped tonnes has been reduced to 380kt to 440k (down from the previous 440kt to 490kt.
