Why did the Pilbara Minerals share price just tumble 5%?

What's with Pilbara today?

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Key points
  • Pilbara shares fell 5% today before pulling back slightly 
  • The lithium producer's share price is still down nearly 4% 
  • Pilbara shares appear to be declining amid American lithium giants sliding overnight and a lower lithium price 

The Pilbara Minerals Ltd (ASX: PLS) share price is declining on the last day of trading before the Easter break.

Pilbara shares fell 5% at yesterday's close to $3.545. Pilbara shares have since recovered some of those gains and are now down 3.62% to $3.595.

For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.76% today.

Disappointed man with his head on his hand looking at a falling share price his a laptop.

Image source: Getty Images

What's going on?

Pilbara is not the only ASX lithium stock in the red today. Allkem Ltd (ASX: AKE) shares are descending 3.57%, while Lake Resources N.L. (ASX: LKE) shares are shedding 5.26%.

ASX lithium shares including Pilbara appear to be sliding after US lithium stocks fell overnight.

Lithium giant Albemarle Corporation (NYSE: ALB) tumbled 6.14%, while Sociedad Quimica y Minera de Chile (NYSE: SQM) slid 1.76%.

As my Foolish colleague James noted this morning, Bank of America securities analysts downgraded Albemarle to underperform and slashed the price target on its shares by 25% to US$195.

Falling lithium prices were the main reason for this downgrade, with the broker noting "the negative earnings revisions are forthcoming".

The Lithium Carbonate Index (battery grade) has fallen 3.42% in a day to US$34,139.67 on the Shanghai Metals Market.

Meanwhile, analysts at Macquarie have recently placed a buy rating on Pilbara shares with a $7.70 price target. This implies an upside of 114% based on Pilbara's current share price.

Macquarie analysts remain positive on Pilbara's earning potential, despite the recent lithium price falls.

Macquarie is forecasting Pilbara to delve out a fully franked dividend per share of 41 cents in FY23 and 30 cents in FY24.

Pilbara Minerals share price snapshot

The Pilbara Minerals share price has climbed 7.31% in the last year.

This ASX lithium share has a market capitalisation of about $10.8 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.

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