Pilbara Minerals Ltd (ASX: PLS) shares are trading in the red on Thursday afternoon. At the time of writing the lithium producer's share price is down 4.5% to $3.72 a piece. It's not done much to dent the surging stock's latest price rally though. Over the past month the shares have jumped 20.62%. They're now an impressive 209.17% higher than just 6 months ago.
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What's happened to the Pilbara Minerals share price?
Pilbara Minerals shares have been on the rise since June, and they've been climbing pretty steadily too. Improved lithium market sentiment and demand has primarily been driven by a surge in interest in electric vehicles (EV) and battery energy storage. Global EV sales have been rising faster than carmakers can keep up! And demand for grid-scale energy storage to stabilise renewable energy is also booming.
It's not just the lithium demand and strong prices pushing the producer's share price higher though. Its business has also strengthened substantially over the past year, positioning the company as a major producer in the market.
In its September quarter update, Pilbara Minerals posted a 2% increase in spodumene production and a 20% increase in realised pricing. This resulted in an exceptional 30% rise in revenue to $251 million.
Pilbara Minerals is also the 100% owner-operator of relatively low-cost, long-life spodumene mines. The company has a strong net cash balance sheet, which gives it more flexibility and a competitive edge over some of its peers.
Is there any more upside ahead?
The rally for lithium demand has exploded this year, and while there are concerns that some lithium producer's shares have now peaked, I don't think this is the case for Pilbara Minerals.
The stock has made headlines recently for being one of the most-traded shares last week, albeit the majority was selling activity. This also supports claims it is also one of the 10 most-shorted shares on the ASX.
Data shows that analysts are divided on the stock, with most having hold or buy ratings on the stock. Out of 20 analysts, 9 have a hold rating and 6 have a strong buy rating on Pilbara Minerals shares. The average target price is $3.11, however some think the share price could rise as high as $4.40 over the next 12 months. At the time of writing that represents anything from a potential 16.41% downside to an 18.28% upside.
