After a bloodbath on Monday, brokers are very optimistic about Pilbara Minerals shares.
It rose 5,36% yesterday but is down over 37% so far in 2025.
This follows its fall to a nearly four-year low on Monday.
Pilbara Minerals Ltd (ASX: PLS)
PLS is a global producer of lithium materials. The company, formerly known as Pilbara Minerals, announced the change to its branding upon completion of the acquisition of Latin Resources in February this year.
The company owns and operates the world's largest independent hard rock lithium operation, the Pilgangoora Operation in Western Australia, and the Colina Project in Brazil.
If you're not familiar, lithium is used primarily in the production of rechargeable batteries, especially for:
- Electric vehicles (EVs)
- Portable electronics (like smartphones, laptops, and tablets) and;
- Renewable energy storage systems.
At the time of writing, PLS shares are trading at $1.38 apiece.
However, a recent report from Macquarie placed an attractive $2.40 price target, a 73.91% upside.
Why so bullish?
According to Macquarie, the recent tariff and trade conflict between the US and China could result in "economic stimulus measures to revive domestic consumption and offset the impact of weaker exports."
Subsequently, the electric vehicle (EV) sector could be prioritised as a significant focus and provide support for lithium demand.
Macquarie also predicts lithium prices could stabilise around RMB70,000/t LCE.
So, what does this mean for PLS?
Macquarie projects lithium prices might settle around RMB70,000 per ton. That's roughly the cost for many Chinese producers to break even.
This could be good news for PLS for several reasons:
- PLS is generally a low-cost producer compared to many Chinese companies. If the price floor is close to the break-even point for Chinese producers, but PLS can produce for less, it means it stays profitable, and higher-cost competitors might reduce production, supporting prices further.
- Unlike many Chinese producers who rely on downstream integration (like battery production) to stay profitable, PLS focuses more on upstream lithium mining. If prices stay high enough for upstream to remain profitable on its own, PLS benefits directly—without needing to offset costs via other operations.
Macquarie isn't the only broker that's optimistic about PLS shares.
Bell Potter also has a target price of $2.40, while Trading View analysts have a one-year price target of $2.54.
