The Pilbara Minerals Ltd (ASX: PLS) share price climbed higher today.
At the close of the ASX on Wednesday, the Australian lithium-tantalum producer gained 3.04% at $1.50 a piece. Over the past month, Pilbara's share price has increased 12.96%.
It's good news for investors looking to recoup some gains lost over the year. Over the past 12 months, Pilbara Minerals' share price has fallen 50%.
Like all S&P/ASX All Ords Index (ASX: XAO) lithium shares, the producer has been hit by a continued decline in lithium prices amid a global oversupply.
But does the latest uptick suggest things are about to turn?
Here's why Pilbara Minerals is moving higher today.
Image source: Getty Images
Lithium prices are rising
After a significant downturn in lithium prices, Trading Economics data shows lithium prices have started climbing. As of the time of writing, the lithium price has risen 0.64% over the day, and is up 4.89% over the month.
While prices remain below historical peaks, it's possible Lithium's price may have bottomed and started to recover. This could support a recovery in the miner's valuation and share price.
Analysts positive on the stock
While overall, analyst opinions are mixed, several are optimistic about the stock and indicate a potential upside for its share price.
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.
The broker has a buy rating and $2.00 price target on Pilbara Minerals shares.
Based on its current share price, this implies a potential upside of 30.7% for investors over the next 12 months.
Macquarie recently retained its outperform rating on the stock too, but with a reduced target price of $1.50.
The broker said that while lithium prices have moved lower, and its commodity strategy team's analysis suggests that prices are now around the 50th percentile of the cost curve, there has not been any meaningful production cuts yet.
Macquarie thinks a recovery in the lithium price is still some time away, but it also said that given its low costs and cheap valuation, it sees value in Pilbara Minerals' shares at current levels.
Pilbara is focused on operational efficiency
Rather than business expansion, the lithium producer has been focused on enhancing its operational efficiency by implementing cost-reduction measures. This approach has helped the company to hold its financial position amid the downturn and put it in a good financial position as lithium price growth improves.
"Capital discipline is critical as margins evaporate in the current price environment," Pilbara Minerals CEO said, according to Discovery Alert.
