Down 26% in June, is it time to dig into Pilbara Minerals shares?

The lithium stock had endured a horror start to the month. But what’s next?

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Key points

  • PIlbara Minerals shares have had a horror start to winter
  • The lithium stock has lost more than 26% since the end of May
  • But some experts suggest this could be a good time to buy Pilbara shares

It’s certainly been a rough month so far for the Pilbara Minerals Ltd (ASX: PLS) share price.

Even though we’re only 10 days into June, Pilbara shares have fallen a painful 26.6% this month so far. That includes the nasty 5.7% drop to $2.16 a share that this ASX 200 lithium stock has fallen by so far today.

But these latest moves can also be seen as just an extension of the woes that Pilbara Minerals shares have been experiencing all year. Since reaching a new high of $3.89 a share back in mid-January, Pilbara shares have now fallen more than 44%.

The latest chapter in the story of these falls came right at the start of this month. On 1 June, we covered how broker Goldman Sachs put out a note that warned of a “sharp correction” in lithium prices over the coming two years.

Goldman predicted that we could see falls from US$60,350 per tonne to around US$54,000 per tonne over this year. But it is also expecting this to drop dramatically to as low as US$16,372 per tonne by 2023.

This prediction pulled the rug out from under ASX lithium shares when it became public. As we covered at the time, PiIbara Minerals shares were down 22% at one point that day.

What’s next for Pilbara Minerals shares?

So with such dramatic falls under the belt, could it finally be time to dig into Pilbara shares this June?

Well, it could be, according to some ASX expert investors.

This week, my Fool colleague Brooke covered how analysts at Macquarie Group Ltd (ASX: MQG) reckon there is still “material upside to lithium miners” after these falls. These analysts point to how Pilbara is already “factoring in realised lithium prices of approximately US$13,000 per tonne”.

But opinions are certainly mixed right now.

Earlier this month, my Fool colleague Bernd also covered fellow broker Credit Suisse’s opinion. Credit Suisse is currently “neutral” on Pilbara shares. Saying that, this broker still has a $3 share price target on Pilbara. That implies a potential upside of more than 38% on current pricing.

So some ASX experts are still confident Pilbara shares will reach higher form here. But it is certainly a tough period for the Pilbara Minerals share price and its fellow ASX lithium shares at the moment.

Motley Fool contributor Sebastian Bowen 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 has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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