If you are wanting exposure to the beaten down lithium industry, then Pilbara Minerals Ltd (ASX: PLS) shares could be the way to do it.
That's the view of analysts at Bell Potter, which continue to see this lithium giant as one to buy.
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What is the broker saying about this lithium miner?
Bell Potter notes that the lithium miner will be releasing its fourth quarter and full year update this month. This will be the first full quarter since the completion of its P1000 ramp up.
The broker believes that the company will have achieved the upper end of its production guidance and the low end of its cost guidance. It said:
PLS' focus in the June 2025 quarter was on plant optimisation and cost-out initiatives, being the first full quarter following the P1000 ramp-up. We forecast quarterly production and sales of 200kt at a unit cost of A$611/t FOB, taking full year production to the upper end of FY25 guidance (700-740kt, BP est. 733kt) and FOB unit costs at the lower end (A$620-640/t, BP est. A$625/t).
Though, offsetting some of this will be weaker lithium prices. The broker adds:
Realised pricing will be weaker, in line with the 20% fall in the average quarterly spodumene concentrate 6% index (Fastmarkets US$704/t, Q3 FY25 US$876/t). During the quarter, PLS reported an updated Pilgangoora Mineral Resource Estimate of 446Mt at 1.28% Li2O (5.7Mt contained Li2O), a material grade uplift compared with the prior estimate (1.15% Li2O) as exploration success in the Central area added 87Mt at 1.5% Li2O.
Should you buy Pilbara Minerals shares?
The team at Bell Potter continues to see value in Pilbara Minerals shares despite a recent rebound.
According to the note, the broker has reaffirmed its buy rating and $2.00 price target on the lithium miner's shares. Based on its current share price of $1.71, this implies potential upside of approximately 17% over the next 12 months.
Bell Potter remains positive on the outlook for lithium over the long term due to electric vehicle (EV) demand. Commenting on its buy recommendation, the broker said:
PLS operates a low-cost asset in a tier one jurisdiction, is vertically integrating across 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.
