Up 52% since June, should you buy the rally in Pilbara Minerals shares?

A leading expert delivers his verdict on the outlook for Pilbara Minerals shares.

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Pilbara Minerals Ltd (ASX: PLS) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium miner closed yesterday trading for $1.69. As we head into the Tuesday lunch hour, shares are changing hands for $1.73, up 2.5%.

For some context, the ASX 200 is up 1.1% at this same time.

Today's outperformance is par for the course since early June.

On 3 June, Pilbara Minerals shares closed at one-year lows of just $1.14 a share. This means the ASX 200 lithium stock is up 51.8% in just two months.

Taking a step back, however, shares remain down 35% since this time last year amid a lengthy stretch of weakness in global lithium markets.

With this picture in mind, should you buy into the rally today?

Pilbara Minerals shares: Buy, hold, or sell?

Fairmont Equities' Michael Gable recently ran his slide rule over the ASX 200 lithium miner (courtesy of The Bull).

"Most lithium miners have rallied well in the past few weeks and there are signs the sector is at or near the bottom," he said.

Gable noted:

Like most lithium miners, PLS had been trending lower for the past two years, but it recently reached a new peak on the share price chart by breaking above the May high on good volume.

Still, Gable isn't ready to pull the trigger just yet, with a hold recommendation on Pilbara Minerals shares.

"It's early days, but this could be the first step in PLS breaking the downtrend and embarking on a likely recovery," he concluded.

Turning to the consensus analyst view on CommSec, this comes out as a 'moderate buy' with 11 strong buy recommendations, one moderate buy, three holds, one moderate sell, and two strong sell recommendations.

What's the latest from the ASX 200 lithium stock?

The last price-sensitive news for Pilbara Minerals shares was the company's fourth-quarter update, released on 30 July.

For the three months to 30 June, the miner achieved spodumene (lithium ore) production of 221,300 tonnes, up 77% from the prior quarter.

And sales volumes were up 72% quarter on quarter to 216,000 tonnes.

While operating costs declined by 10%, so too did the price the miner received for its lithium, which was down 17%.

Still, the company managed to increase revenue by 28% from the third quarter to $193 million.

Investors responded by sending Pilbara Minerals shares up 3.0% on the day.

The miner is scheduled to report its full-year FY 2025 results on 25 August.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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