The Pilbara Minerals Ltd (ASX: PLS) share price is in the green year to date, but what is the outlook in May?
Pilbara shares have risen 13% since the start of the year and are now trading at $4.245. In today's trade, Pilbara shares are up 1.07%.
Let's take a look at the outlook for the Pilbara share price.
What's ahead?
Pilbara's share price in May could be impacted by a variety of factors including the lithium price, any price-sensitive updates from the company and broker coverage.
Pilbara produces lithium from its 100% owned Pilgangoora Project, near Port Hedland in Western Australia's Pilbara region.
The company is increasing production capacity at the mine with an aim of producing 1 million tonnes per annum by 2025.
Analysts at Macquarie have recently placed an outperform rating on Pilbara shares with a $7.70 price target. This implies an upside of 81% based on the current share price.
The team at Macquarie noted the miner is delivering plenty of free cash flow from its operations. Macquarie is also predicting Pilbara's dividend could be 42 cents per share in FY 2023.
Outlook for the lithium price will depend on demand and supply. Chile has recently announced a policy to nationalise lithium, which may impact supply from the country.
Commenting on the outlook for lithium in a recent report, ANZ commodity strategists Daniel Hynes and Soni Kumari said:
The outlook for the EV sector remains strong. We expect these latest supply side issues to reignite supply concerns, leading to a rebound in prices.
US lithium producer Livent Corp (NYSE: LTHM) recently expressed optimism on the lithium price during a quarterly conference call. Livent CEO Paul Graves sees strong demand for lithium "outside China, especially in Japan and South Korea", Reuters reported. He said:
The spot market in China is not reflective of the entire market. We have not reduced our lithium demand expectations for 2023.
We are absolutely not demand constrained, but we are absolutely supply constrained.
Pilbara reported a cash balance of $2.6 billion in the March quarter, up 21% on the previous quarter. Shipments fell 3% to 144,312 dry metric tonnes of spodumene concentrate. The company declared a maiden fully franked interim dividend of 11 cents per share.
Pilbara Minerals share price snapshot
The Pilbara Minerals share price has returned 61% in the past year.
Pilbara has a market cap of about $12.73 billion based on the latest closing share price.
