Pilbara Minerals Ltd (ASX: PLS) shares have underperformed benchmarks this year, and owners of the stock have had to endure some stomach-churning volatility.
For most of the year, the ASX lithium share has also featured weekly on the ASX's most heavily shorted stocks list, with those betting on a falling Pilbara Minerals stock price profiting handsomely.
Whether lithium stocks return to strength remains up for debate. Lithium prices are heavily compressed from former highs amid a supply glut and weak demand for the batteries the metal is used in.
But Pilbara's annual general meeting (AGM) on Tuesday gave investors plenty to digest, from updates on growth projects to insights into the company's evolving strategy. So, where does the company go from here, and what does it mean for Pilbara Minerals shares? Let's see.
Key AGM points for Pilbara Minerals shares
The AGM highlighted Pilbara Minerals' journey throughout the desolate lithium landscape these past 12 months.
Chairman Dale Henderson detailed how the company has grown from an exploration venture into a lithium heavyweight, supplying 11% of the world's hard-rock lithium from its flagship Pilgangoora project.
Henderson also commented on the bright future of the market despite its current slump.
The agile nature of our operating model and ability to adapt to changing market conditions has placed us in a strong position.
In 2015, around the same time the team of geologists were drilling the first holes at Pilgangoora, a total of 370,0002 electric vehicles were sold worldwide. Fast forward to 2024, and China alone now sells the same number of EVs every two weeks.
Looking further ahead, long term demand for EVs and battery storage remains incredibly robust. We believe that no other lithium company is better placed to weather current conditions and capitalise when the market turns, than Pilbara Minerals.
He also mentioned the P680 Project had already ramped up production and cut costs, while the P1000 Project was now 80% complete and set to deliver first ore by early 2025.
Meanwhile, Pilbara Minerals is making moves beyond Australian shores. Its joint venture with POSCO in South Korea has achieved lithium hydroxide production.
In a push for diversification, it also acquired Latin Resources Ltd (ASX: LRS)'s Salinas Lithium Project in Brazil.
Tough lithium market, tougher strategy
The lithium market has been a wild ride lately, with oversupply concerns pushing prices down. For Pilbara Minerals, this has meant navigating some challenging headwinds.
Several mines have been mothballed this year as a result, and Pilbara decided to pause operations at its smaller Ngungaju plant until prices recover.
Whilst Henderson is bullish on the market, according to Trading Economics, 190 tonnes of mine curtailments have occurred since 2023.
Despite relatively high stocks from a historical standpoint, battery manufacturers also reportedly raised purchasing activity amid risks of a trade war after Trump assumes office next year in the US.
In turn, the plunge in prices during the year drove multiple mines in Australia and China to close or cut costs…
As such, lithium prices remain the elephant in the room. Until they stabilise — or ideally recover — Pilbara Minerals shares faces an uphill climb.
Are brokers bullish on Pilbara Minerals shares?
Analysts are split on the stock, which, on analysis, likely reflects the broader uncertainty in the lithium market. The different possibilities of outcomes are broad.
However, three different brokers have three different opinions on the stock, which makes it simply fantastic for market observers.
UBS is bearish, assigning a $2.35 price target and raising concerns about global lithium oversupply.
Bell Potter is neutral, valuing the stock at $2.95 and praising Pilbara's operational strength while acknowledging market volatility. Fair game.
Morgans, however, is the one wearing the bull horns, rating the stock a buy with a $3.25 target. It reckons Pilbara Minerals is in a prime spot to scale production quickly when (or if) the market turns.
Foolish takeaway
Pilbara Minerals continues to churn the lithium engine despite a soft commodity market and weak demand for the metal. Like all miners, it is a price taker at the mercy of market pricing on the commodities it produces.
The company's chair laid out a number of talking points in its AGM, which may or may not have some bearing on the stock price. Ultimately, it's up to management to execute and lithium prices to improve.
In the last 12 months, Pilbara Minerals shares are down 31%.
