Pilbara Minerals Ltd (ASX: PLS) shares are going to be closely followed next week when the lithium miner releases its half year results.
But what is the market expecting from the lithium giant? Let's see what analysts are predicting:
Pilbara Minerals half year results preview
Firstly, it is worth noting that earlier this week the company provided the market with an idea of what to expect when it releases its results on 20 February.
For the underlying Pilgangoora Operation, the company's underlying earnings before interest, tax depreciation and amortisation (EBITDA) and net loss are expected to be in the following range:
- Underlying EBITDA: $71 million to $75 million
- Underlying net loss after tax: $5 million to $7 million
According to a note out of Bell Potter, its analysts are now expecting the company to report underling EBITDA in the middle of its range at $73 million. This is down from its previous estimate of $80 million.
On the bottom line, the broker expects the company to record a loss of $7 million for the half. This compares very unfavourably to its previous expectation for a profit of $13 million.
On a statutory basis, things will be much worse with Pilbara Minerals guiding to a statutory loss of $68 million to $71 million. Bell Potter expects a loss of $69 million.
This statutory loss includes special items relating to joint ventures and its mid-stream demonstration plant project.
Should you buy Pilbara Minerals shares?
Despite expecting a poor half year result from the company, Bell Potter is still very positive on the investment opportunity here.
As a result, this week the broker reiterated its buy rating and $3.00 price target on the company's shares.
Based on its current share price of $2.25, this implies potential upside of 33% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
While a negative update, we had forecast a weak financial result. In 1H FY25, Fastmarkets' SC6 index price averaged US$830/t (the lowest level since June 2021) and Pilgangoora operations were impacted by the tie-in and commissioning of expansion projects. Lithium prices have since stabilised, P1000 has achieved first ore, and Train 1 at the hydroxide JV is selling battery-grade products following receipt of first product certification in November 2024.
PLS operates a low-cost asset in a tier one jurisdiction, is diversifying through the lithium value chain, and provides a clean exposure to global lithium fundamentals and sentiment. While we expect lithium prices to remain volatile, we hold a robust EVdemand driven long-term market outlook. We believe higher prices are required to incentivise new sources of supply to moderate our forecast market shortfalls from 2026-27.
