The ASX lithium share Pilbara Minerals Ltd (ASX: PLS) has had an incredible performance in 2025 to date, rising by around 80%, as the below chart shows. You may be wondering what's predicted for the business in the coming year.
PLS Group, which the company recently changed its name to, has benefited from a resurgence in investor confidence about the lithium industry after a difficult period for the supply and demand balance of the key battery commodity.
But, some analysts may now think that the Pilbara Minerals share price may have run too far. Let's take a look at what's expected for the business over the next 12 months.
Price targets for the Pilbara Minerals share price
A price target can be informative of whether analysts think a business is overvalued or undervalued.
The price target is where analysts think the share price will be in 12 months from the time of the investment call.
According to CMC Markets, analysts are quite mixed on PLS Group right now, with five buy ratings, five hold ratings and three sell ratings.
But, the average price target of $3.08 across those analysts is certainly negative. That implies a possible decline of 25% over the next year, which would be a significant decline to where it was a couple of months ago. That would still represent a sizable increase from where it was in December 2024.
What's going on with the lithium price?
UBS recently released a note that talked about how there has been an increase in battery energy storage systems (BESS) demand:
Following a ~2-year bearish stance on lithium, we shifted to Neutral in August due to: ongoing supply disruptions, further anticipated disruptions to Chinese lepidolite producers (CATL) and resilient overall demand. In this note, we have materially increased our short to mid term lithium price deck following an 11% increase in lithium demand driven by BESS. We now envisage markets moving into deficit from 2026 onwards.
With spot now trading at US$1,170/t, we have lifted our lithium forecast to US$1,800/t/US$2,850/t/US$2,625/t SC6 CFR China in 2026/27/28 (+64%/148%/94% from prev. forecast), though we leave our long term incentive based price unchanged at US$1,200/t.
UBS also said that after coming off a low base, it has increased earnings projections in FY27 and FY28 by more than 100% for the pure lithium plays, including PLS Group, which is exciting for owners of Pilbara Minerals shares. This is a "steep turnaround from burning cash" as recently as the last quarter for some lithium miners, according to UBS.
The broker upgraded its global battery demand by up to 11% between 2025 to 2030. On the UBS' global battery team numbers, BESS will account for around 31% (1.2TWh) of total battery demand by 2030, compared to around 20% today.
UBS currently has a neutral rating on Pilbara Minerals shares, with a price target of $4, implying little change in the valuation over the next 12 months.
