The Pilbara Minerals Ltd (ASX: PLS) share price has already surged nearly 32% year to date, but could it even go higher?
Pilbara shares are climbing 2.45% in today's trade to $5.02 apiece. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is 0.76% in the red today.
Let's take a look at the outlook for the Pilbara Minerals share price.
Could Pilbara go higher?
Pilbara produces lithium from Pilgangoora Project, near Port Headland in Western Australia.
Pilbara Minerals shares are a "buy" according to Seneca investment advisor Arthur Garipoli.
Commenting on Pilbara on The Bull, Garipoli highlighted Pilbara's higher production, lower operating costs, and improved cash balance in the December quarter. He added:
In our view, the company offers strong growth potential. It may announce a maiden interim dividend.
Pilbara delivered a 10% lift in spodumene concentration production in the December quarter to 162,151 dry metric tonnes (dmt). The company's cash balance grew 60% from $1.375 billion to $2.226 billion. Operating costs fell 5% to $579 per dry metric tonne.
Pilbara announced an "inaugural dividend policy" in November. The company is targeting a dividend payout ratio at 20 to 30% of free cash flow.
Meanwhile, the team at Morgans has also recently recommended Pilbara Minerals as a buy. The broker retained an add rating and lifted the price target on Pilbara to $5.40. This implies an upside of about 9% based on the current share price. Morgans was also impressed with Pilbara's quarterly update.
Share price snapshot
Pilbara Minerals shares have soared 53% in the last year.
Pilbara has a market capitalisation of nearly $15 billion based on the current share price.
