As things stand, the Pilbara Minerals Ltd (ASX: PLS) share price is on course to smash the market this financial year.
In fact, any investors that were lucky enough to have bought the lithium miner's shares at the end of the previous financial year are on course to double their money.
But that's all in the past. What's going to happen in the next financial year? Let's take a look.
Will the Pilbara Mineral share price beat the market in FY24?
The good news is that one leading broker continues to believe that there are still big gains ahead for the Pilbara Minerals share price.
A recent note out of Macquarie reveals that its analysts have an outperform rating and a $7.30 price target on its shares.
This implies a potential upside of 51% over the next 12 months. Not bad given how much they have already risen in the preceding 12 months!
However, this gain is likely to depend largely on how lithium prices fare between now and this time next year. Macquarie remains bullish on the battery-making ingredient, but not everyone feels that way.
Last weekend, Goldman Sachs released its weekly lithium update and reiterated its belief that the lithium carbonate price will fall from the current spot price of US$52,750 a tonne to an average of just US$15,331 a tonne in 2024.
It's a similar story for spodumene, with the broker forecasting an average price of US$52,526 per tonne in 2023 and then US$17,273 per tonne in 2024.
If these forecasts prove accurate, Pilbara Minerals' profits would take a major hit. For example, Goldman is expecting earnings per share of 85.4 cents in FY 2023, 68.6 cents in FY 2024, and then just 21.6 cents in FY 2025.
In light of this, investors might want to keep a close eye on spot lithium prices. If they start to fall precipitously, don't be surprised if the Pilbara Minerals share price goes with them.
