Up 4% in FY23, what’s next for the Pilbara Minerals share price?

The lithium pure-player looks to extend its gains further this financial year.

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Key points

  • Pilbara shares are trading lower on Tuesday
  • Brokers are constructive on the lithium share despite a pullback in prices received at its latest BMX auction
  • In the last 12 months, Pilbara has clipped a 58% gain

The Pilbara Minerals Ltd (ASX: PLS) share price is struggling today. At the time of writing, the lithium share is 2.46% lower at $2.38 apiece.

After a rocky period to finish FY22, Pilbara has started the new financial year well on the chart. It is up 4% in July, having bounced from six-month lows on 23 June.

In broader market moves, the S&P/ASX 300 Metals and Mining index (ASX: XMM) is also down 0.52% on Tuesday.

TradingView Chart

What’s in store for the Pilbara Minerals share price?

Last week, Pilbara announced a drop in lithium prices via its battery materials exchange (BMX) auction process. This is the first dip since the BMX began.

The price nudged down 2.5% month on month to approximately US$6,841 per dmt [dry metric tonne] on 5.5% lithia. This was for a 5,000 dmt cargo of lithium for delivery in August.

Still, just a month earlier, the company advised it had accepted a record pre-auction offer of US$7,017 per dmt on the same specifications.

Still, brokers are bullish on the Pilbara share price. According to a note from Macquarie, its analysts rate Pilbara a buy on a $4.20 per share valuation.

Curiously, despite the lower BMX auction price, Macquarie was still impressed by the prices Pilbara has received – higher than the broker’s estimates.

Pilbara is also rated a buy from around 86% of brokers covering the share, with the remainder suggesting to hold, according to Refinitiv Eikon data.

From this list, the consensus price target is $3.13 per share. That’s roughly 28% return potential from the current market price.

Pilbara share price snapshot

In the last 12 months, the Pilbara share price has recorded a 58% gain but has lost 26% year to date.

The company has a current market capitalisation of just over $7 billion.

Motley Fool contributor Zach Bristow 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 no position in any of the stocks mentioned. 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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