The Pilbara Minerals Ltd (ASX: PLS) share price has been one of the best performers in FY26 to date, rising by close to 80% in that time, as the chart below shows. The ASX lithium share has seen a recovery in investor confidence and operating conditions.
Time will tell if the market is justified in being excited, but there are a few factors that investors should keep in mind to decide whether the business is a buy or not.
Past performance is not a guarantee of future performance, so we shouldn't expect another 80% in the next few months. Let's take a look at what experts think of the situation.
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Positives about Pilbara Minerals shares
In a recent note from UBS, the broker said it was increasing its forecast for spodumene (SC6 CFR China) lithium prices by 32%, 10% and 23% for 2026, 2027 and 2028 to US$1250 per ton, US$1,150 per tonne and US$1,350 per tonne, compared to the spot lithium price of US$940 per tonne, which was driven by Chinese supply disruptions and the likely potential for more.
UBS' base case now assumes a 12-month suspension of CATL's lepidolite mine and between nine to 12 months of suspension of the other seven lepidolite mines from 30 September 2025. Time will tell how long these suspensions last, with "higher prices potentially solving permitting issues more quickly and incentivising some latent capacity" according to UBS.
Due to the above, the broker sees "material upgrades" for the earnings per share (EPS) for Pilbara Minerals.
The broker then said Pilbara Minerals is best positioned for the next cycle with the balance sheet and project combination.
UBS said the FY25 result highlighted its sector-leading balance sheet, with $599 million of net cash and strong growth options.
The broker is also expecting the business to deliver 880kt of production in FY26, above the guidance of 820kt to 870kt, thanks to its strong operating history.
Negatives
While conditions have improved, the Pilbara Minerals share price has significantly improved and may well already reflect the optimism.
That was reflected in the price target on the ASX lithium share by UBS. A price target is where the broker thinks the share price will be in 12 months from now.
UBS increased its price target by 44% to $2.30 from its previous target. That's a big increase, but that price target is slightly lower than where the Pilbara Minerals share price is currently sitting. Therefore, it's not expecting any capital growth in the next 12 months.
The broker currently has a neutral rating on the business, so there could be better ASX share opportunities out there.
