The Pilbara Minerals Ltd (ASX: PLS) share price finished Wednesday's session up 1.29% to $5.50.
Just six months ago, the ASX lithium share was fetching just above $2.50. That's right, the Pilbara Minerals share price is up an eye-watering 117% over this period. That's just nuts.
Allow my Fool colleague Sebastian to blow your mind further. A bit over two years ago, Pilbara was a 30-cent share. So, it's up more than 1,000% in two years.
But according to reporting in the Australian Financial Review (AFR), JPMorgan is neutral on Pilbara Minerals. And that's an upgrade from its previous forecast.
The broker also has a 12-month share price target of $5.10 on Pilbara Minerals. Oops. Pilbara shares have already soared past that level.
So, has JPMorgan got it wrong?
Why is the Pilbara Minerals share price going gangbusters?
Well, there's no doubt that lithium shares have got some great momentum right now. They continue to rise on the back of the surge in global electric vehicle (EV) manufacturing and there's a long way to go.
In a recent investor presentation, Argo Investments Limited (ASX: ARG) demonstrated that global EV sales are expected to climb drastically from about six million in 2022 to 30 million in 2030.
This demand has, in turn, resulted in an astronomical increase in the lithium price, which means every company mining it has been raking in revenue like never before.
The lithium share price hit another record this month, and is up 3.49% over the past week to US$81,759 per tonne, according to Trading Economics.
What do other brokers think?
A quick canvas of recent broker commentary suggests that Pilbara Minerals is looked upon favourably as a business. No doubt, it's benefitting enormously from the lithium price surge. The only 'problem' is the astronomical short-term share price gain, which has potentially made Pilbara Minerals too expensive now.
UBS and Credit Suisse have both slapped sell ratings on Pilbara Minerals shares. Their price targets imply a drop of at least 40%.
Citi has also put a sell on the stock on valuation grounds, saying the Pilbara Minerals share price has risen "too far, too fast." Citi increased its share price target to $4.60.
Citi said: "[Pilbara Minerals] stock is up by 160% in a year, well ahead of peers; we move to Sell from Neutral on valuation."
In a recent interview with my colleague Bernd, Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund said Pilbara Minerals "has been a longstanding favourite of ours".
But he noted that the very strong share price gain meant "maybe some of the best returns are behind it".
Rehder said:
The stock is up 50% this calendar year, after a 270% rise in 2021. So, maybe some of the best returns are behind it. But it continues to offer high-quality exposure to that green energy thematic, via its long-life, low-cost lithium mines in WA.
Wilsons equity strategist Rob Crookston said the team's preference among ASX lithium shares is Allkem Ltd (ASX: AKE). They like Pilbara Minerals as well but also draw attention to the stretched valuation.
Crookston said: "While PLS screens attractively on near-term valuation multiples, the company appears to offer less valuation appeal over the medium-term."
