With $1 billion in cash on the balance sheet, should you buy Pilbara Minerals shares today?

A leading expert delivers his verdict on Pilbara Minerals surging shares.

| More on:
A balance sheet and calculator for assessing a company or individual's financial position

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Pilbara Minerals Ltd (ASX: PLS) shares are up 205% since the early June lows, driven by strong cost control and increased lithium prices.
  • The company reported a 30% increase in quarterly revenue to $251 million due to higher spodumene production and a 20% increase in average realised prices.
  • Baker Young's Toby Grimm said Pilbara Minerals is "our preferred lithium exposure".

Pilbara Minerals Ltd (ASX: PLS) shares enjoyed another day in the green on Wednesday.

When the closing bell rang, shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock were changing hands for $3.43 apiece, down 0.15%.

For some context, the ASX 200 also closed the day just about flat.

While Pilbara Minerals shares are now 'only' up about 9.5% over 12 months, the stock has been racing higher since plumbing four-year closing lows of $1.14 a share on 3 June.

At Wednesday's close, that marks a gain of 200% in just over five months. Or enough to turn an $8,000 investment in early June into around $24,000 today.

Boom!

But with those kinds of outsized gains already in the bag, is the ASX 200 lithium stock still a good buy today?

Should you buy Pilbara Minerals shares today?

Baker Young's Toby Grimm recently ran his slide rule over the Aussie lithium miner (courtesy of The Bull).

"The lithium miner's latest quarterly results highlight why we view PLS as our preferred lithium exposure," said Grimm.

"The company showed exceptional cost control. Mining costs fell 13% at the same time as the average price it received rose by 20%, driving a major boost in operating profit," he noted.

Indeed, Pilbara Minerals shares closed up 9.1% on 24 October, the day the miner reported its first-quarter (Q1 FY2026) results.

Other key results included a 2% quarter-on-quarter increase in spodumene production to 224,800 tonnes. And with the company achieving a 20% increase in its average realised price for the lithium-bearing mineral, September quarterly revenue of  $251 million was up 30% from the prior quarter.

Then there's the miner's strong balance sheet.

According to Grimm:

Pilbara has already achieved highly competitive scale and has more than $1 billion in cash on the balance sheet to fund material output growth should an anticipated lithium recovery take shape in coming years.

But following the big uptick in the share price, Grimm currently has a hold recommendation on Pilbara Minerals shares.

What's happening with global lithium prices?

Atop its own operational successes, Pilbara Minerals shares have caught significant headwinds from the rebounding lithium price, which is now up around 38% from late June's multi-year lows.

And according to global investment bank JPMorgan Chase & Co (NYSE: JPM), growing demand for EVs and the rapid rollout of large-scale battery storage systems are likely to drive a sustained boost in prices in 2026 and 2027.

"After what was looking like a soft few years ahead for lithium prices, energy storage battery shipments have shown massive growth year-to-date," Lyndon Fagan, JPMorgan's head of basic materials research, said.

The bank has boosted its forecast for spodumene prices to between US$1,100 and US$1,200 per tonne for 2026 and 2027, up from its prior forecast of US$800 per tonne.

JPMorgan Chase is an advertising partner of Motley Fool Money. 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 positions in and has recommended JPMorgan Chase. 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.

More on Resources Shares

A coal miner smiling and holding a coal rock, symbolising a rising share price.
Resources Shares

Which copper developer's shares are flying after a positive economic study for their proposed mine?

The numbers are stacking up for this offshore mining project.

Read more »

Two workers working with a large copper coil in a factory.
Resources Shares

Strike action sends major copper producer's shares lower

Processing will soon grind to a halt.

Read more »

Green stock market graph with a rising arrow symbolising a rising share price.
Resources Shares

So the PLS share price made it past $5. Big deal. What's next?

The lithium miner's shares are rocketing higher.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Resources Shares

South32 shares hit a 12-month high after a solid first-half performance

Good numbers delivered across the board.

Read more »

Concept image of a businessman riding a bull on an upwards arrow.
Resources Shares

Up 108% in a year, why this buy-rated ASX 300 mining stock is tipped for more outperformance

A top broker is flagging more gains ahead for this surging ASX 300 mining stock. But why?

Read more »

Four people on the beach leap high into the air.
Opinions

4 reasons why I think BHP shares are a must-buy for 2026

The mining giant's shares are now 20% higher than this time last year.

Read more »

Miner holding a silver nugget.
Resources Shares

Up 300% over a year, this minerals explorer still has further to go, one broker says

Recent silver and tin exploration results are encouraging.

Read more »

A miner holding a hard hat stands in the foreground of an open-cut mine.
Resources Shares

Dateline shares halted as investors await key announcement

Dateline shares are halted as investors await a potentially market-moving announcement.

Read more »