Is it time for 'cashing in some gains' on Pilbara Minerals shares?

The pure-play lithium producer has seen a remarkable 12 months but could it be time to sell?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Pilbara shares have rocketed 125% in a year 
  • The company explores lithium from the Pilgangoora Project near Port Hedland 
  • This week Pilbara accepted a pre-auction offer of US$7,100 per dry metric tonne of spodumene concentrate 

The Pilbara Minerals Ltd (ASX: PLS) share price has exploded in the past year.

Shares in the pure-play lithium company have surged 125% in the last 52 weeks to $4.80 apiece as at Tuesday's market close.

So is now a good time to sell, or is it better to hold Pilbara Minerals shares?

A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.

Image source: Getty Images

Hold or sell?

Pilbara operates the Pilgangoora Project near Port Hedland in Western Australia. This is regarded as one of the biggest hard rock lithium deposits in the world.

Red Leaf Securities CEO John Athanasiou recently recommended investors "sell" Pilbara Minerals shares, citing the company's recent gains. Commenting on The Bull, he said:

The company's been benefiting from higher lithium prices.

In fiscal year 2022, the company generated sales revenue of $1.2 billion, a 577 per cent increase on the prior corresponding period. Investors may want to consider cashing in some gains.

Meanwhile, UBS recently rated the Pilbara share price as a sell with a $2.65 price target, my Foolish colleague Tristan reported.

On the flipside, Macquarie placed a $5.60 price target on Pilbara shares in September, as reported by my Foolish colleague James.

A recent federal government report forecasted lithium prices to rise in 2023 before easing in 2024.

In news on Tuesday, Pilbara updated investors on its latest Battery Material Exchange (BMX) auction. The company has accepted a pre-auction offer of US$7,100 per dry metric tonne (dmt) for a shipment of 5,000dmt of spodumene concentrate in mid-November.

Pilbara is also due to release a quarterly activities report next Tuesday.

Share price snapshot

Pilbara shares have soared almost 50% year to date, however, they are down 4% in the past week.

For perspective, the S&P/ASX 200 (ASX: XJO) has fallen 8% in the past year.

Pilbara has a market capitalisation of about $14.2 billion based on the current share price.

Motley Fool contributor Monica O'Shea 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.

More on Materials Shares

Miner with thumbs down.
Materials Shares

PLS shares drop 5%: What's driving the move?

The lithium stock extends monthly losses on weak sentiment.

Read more »

a miniature moulded model of a man bent over with a pick working stands behind a sign that has lithium's scientific abbreviation 'Li' with the word lithium underneath it against a sparse bland background.
Materials Shares

This ASX lithium stock just reached a key milestone. Why is it down?

This lithium stock is down after a key project update.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background.
Materials Shares

PLS shares tumble as the lithium giant reveals its next big move

This lithium stock is sinking despite a big project update.

Read more »

Flying Australian dollars, symbolising dividends.
Materials Shares

This ASX 200 mining stock is up 44% in a year. Why is it climbing again?

Investors are buying this ASX 200 stock after its latest update.

Read more »

Male building supervisor stands and smiles with his arms crossed at a building site with workers behind him.
Materials Shares

Sims lifts outlook as North American metals drive gains

Sims has upgraded its FY26 earnings forecast due to robust North American trading and strong demand in non-ferrous markets.

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Materials Shares

Up 200%: Can Mineral Resources shares keep rising?

Bell Potter has given its verdict on this high-flying stock.

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Materials Shares

Here's why Bell Potter is bullish on Rio Tinto shares amid a commodities 'supercycle'

The broker expects commodity prices to stay higher for longer.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Materials Shares

This ASX materials stock could rise 100% in the next 12 months according to top broker

Its share price has already soared 200% over the past year.

Read more »