Should you buy Pilbara Minerals shares today?

We canvas the experts' views on this ASX lithium stock following last week's FY24 half-yearly report.

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The Pilbara Minerals Ltd (ASX: PLS) share price closed at $3.88 on Tuesday, flat for the day.

Over the past 12 months, the ASX lithium share has lost 6.95% of its value.

That's actually a pretty resilient performance when you consider the lithium carbonate price has plummeted around 75% over the same period.

Perhaps that's why investors appeared unperturbed by last week's 1H FY24 report in which Pilbara Minerals revealed a savage fall in revenue and profit over the six months to 31 December 2023.

Let's recap.

Pilbara Minerals share price unmoved by 1H FY24 profit dive

Last Thursday, Pilbara Minerals reported a 65% revenue decline to $757 million in 1H FY24. This was brought about largely because of a 67% reduction in the average realised price for lithium.

A 7% lift in sales failed to offset the impact of plunging lithium commodity prices. EBITDA plummeted 77% to $415 million and underlying profit after tax dropped 78% to $273 million.

In light of this, the company's board opted not to pay an interim dividend for 1H FY24.

Pilbara Minerals only started paying dividends in March last year. The stock paid a maiden interim dividend of 11 cents and a final dividend of 14 cents in September 2023.

Despite all this gloomy news, the Pilbara Minerals share price was unmoved on Thursday. Literally. The ASX lithium stock finished the day unchanged at $3.66 per share.

Investors looking ahead?

Since releasing its results, Pilbara Minerals shares have actually moved up by 6% to where they are now.

Perhaps that's because some brokers are still bullish on the 12-month outlook for the lithium stock?

As is usual, several brokers have commented on the Pilbara Minerals 1H FY24 report and adjusted their ratings and 12-month share price targets accordingly.

Let's take a look at what the experts have said over the past few trading days.

Should you buy Pilbara Minerals shares?

Citi is the latest broker to weigh in on whether investors should buy Pilbara Minerals at today's share price.

As reported in The Australian, it's a firm 'no' from the Citi team, with the analysts cutting their rating to sell. Citi now has a 12-month target of $3.60 on Pilbara Minerals, which is lower than today's share price.

Goldman Sachs also remains bearish on the ASX lithium share. After Pilbara Minerals' 1H FY24 report, the broker reiterated its sell rating and reduced its 12-month share price target to $2.90.

This implies a potential downside of 25% from here for Pilbara Minerals shares.

However, there's an alternative view.

Analysts at Morgans retained their add rating on Pilbara Minerals, albeit with a trimmed share price target of $4.50 following the half-yearly report.

Morgans said the report fell short of its expectations. However, the broker thinks the company is well-positioned to capitalise on rebounding lithium prices in due course.

Megan Stals, a market analyst at online brokerage platform Stake, notes that the miner is moving ahead with two major expansion projects that could see it take more market share ahead of any rebound.

Stals said Pilbara is a low-cost operator, which gives it an advantage amid today's lithium price slump.

So, perhaps the Pilbara Minerals share price has risen 6% since the miner's half-yearly report because investors are looking ahead and seeing good value?

Indeed, Pilbara Minerals remains among the top 10 most popular buys on the Stake platform today.

Following Thursday's results, Stals said, "We have seen twice as many buys as sells, showing investors are on the whole still positive about Pilbara's long-term prospects."

Farhan Badami, eToro market analyst, said Pilbara's P680 and P1000 projects are on track for completion in FY25 and FY26, respectively, and these would significantly increase production capacity.

Badami commented:

… Pilbara isn't just weathering the storm; they're strategically positioning themselves for the sunshine. Their strong balance sheet provides a crucial buffer against market volatility, and their focus on expansion underscores their confidence in the long-term potential of the lithium market.

He said investors seeking short-term rewards may be wary of Pilbara Minerals shares today.

However, investors with a longer-term horizon "may find value in their solid fundamentals, strategic investments and potential to emerge stronger from this downturn".

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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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