Pilbara Minerals Ltd (ASX: PLS) shares have been having a tough time over the last seven months.
During this time, the lithium miner's shares have lost almost a quarter of their value. That's despite a recent rebound which has seen them rally 15% since this time last month.
While this is disappointing for shareholders, it could be a buying opportunity for the rest of us.
That's the view of analysts at Morgans, which have just added the company's shares to its best ideas list.
Pilbara Minerals shares is a best buy
According to the note, the broker remains very positive on Pilbara Minerals despite the significant weakness in lithium prices.
It believes that the company's strategy of growing production during this phase of the cycle is the right strategy. It commented:
We view PLS as a fundamentally strong and globally significant hard-rock lithium miner. The company has successfully executed on ramping up the expansion of Pilgangoora, while progressing plans to expand output (P680 and P1000). Supported by a strong balance sheet, with net cash at ~A$2.1bn at the end of December, PLS' expansion plans remain uniquely undeterred by the significant weakness in lithium prices.
For PLS, the best form of defence against lithium prices is to stay on the attack, with its medium-term plans to continue expanding its production aimed primarily at building greater economies of scale and a more defensive margin.
Double-digit return expected
The note reveals that Morgans currently has an add rating and $4.50 price target on the Pilbara Minerals' shares.
Based on its current share price of $4.09, this implies potential upside of 10% for investors over the next 12 months.
All in all, this could make it a good option for investors that are looking for quality exposure to the lithium industry right now.
