Pilbara Minerals Ltd (ASX: PLS) shares have been on a horror run in recent sessions.
So much so, the lithium miner's shares have lost over 12% of their value since this time last week.
Are they now too cheap to ignore? Let's see what one leading broker is saying about the beaten down miner.
Are Pilbara Minerals shares dirt cheap?
A recent note out of Bell Potter reveals that its analysts think that investors should be snapping up the company's shares while they are down in the dumps. Especially given the prospect of some very big returns over the next 12 months.
Bell Potter is feeling positive about the company's P1000 project, which combined with its Pilgan Plant optimisation, should be a boost to profitability in the near term. It said:
The P1000 project is targeted to reach nameplate capacity in the current quarter. Capital expenditure will materially reduce, and the focus turns to Pilgan Plant optimisation and cost savings. PLS will continue to assess the trade-off between processing contaminated ore stockpiles, which should provide unit cost benefits but could be at the expense of lower lithium recoveries (low ~70%s, target 75%).
The company maintains a focus on identifying additional cost out initiatives across the broader business, and to further support its market leading balance sheet has extended the call option period in which it can increase its interest (from 18% to 30%) in the POSCO lithium hydroxide JV; we expect this will likely occur in mid-CY26.
Bell Potter is forecasting a loss of $68 million this year but then a rebound to a profit of $76 million in FY 2026 and then $145 million in FY 2027.
Big return potential
According to the note, the broker has a buy rating and $2.00 price target on Pilbara Minerals shares.
Based on its current share price of $1.38, this implies potential upside of 45% for investors over the next 12 months.
To put that into context, a $10,000 investment would turn into $14,500 if Bell Potter is on the money with its recommendation.
Explaining its buy recommendation, the broker concludes:
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 EV demand driven long-term market outlook and believe higher prices are required to incentivise new sources of supply.
