The S&P/ASX 200 Index (ASX: XJO) is having a pretty dire day so far this Monday. At the time of writing, the ASX 200 is down by a depressing 1.24% at just under 7,350 points. So it's perhaps no surprise that the Pilbara Minerals Ltd (ASX: PLS) share price is also suffering.
Pilbara Minerals shares are currently down by a nasty 6.14%, sitting at $2.68. What a way to start the week.
This latest fall means that the Pilbara share price is now down by a tad over 22% over the past month. so with this latest plunge, some investors, and perhaps lithium enthusiasts, will no doubt be wondering if the Pilbara share price is in the buy zone.
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Is the Pilbara Minerals share price in the buy zone today?
So let's see if some ASX expert investors reckon it's time to pounce on Pilbara. Stephane Andre from Alphinity and Mike Murray from Australian Ethical Investment Limited (ASX: AEF) recently spoke to Livewire Markets. Here's what Murray had to say on Pilbara:
It's a hold for us. We were buyers of Pilbara at around 70 cents and it's been a wild ride. I think it fell to 15 cents and then up above $3 and now around that $2.50 level. There's a lot to like about the position of their resource. It's positioned reasonably well on the cost curve.
Lithium demand is growing probably in excess of 20% per annum due to EV uptake and the market in deficit. When I look at spodumene, the price is currently around that US$5,000 per tonne level. In the long run, we think that will settle somewhere between US$800 and US$1,000 per tonne. So it's just moved a bit hard on the upside for us.
Buy, hold or sell?
So lukewarm on Pilbara shares right now from Murray and Australian Ethical. But let's hear what Andre had to say:
[Pilbara is] a buy for me. I still really like the dynamic of lithium. I completely agree with Mike. The growth and demand are going to be significant. Some forecast six times growth between 2020 and 2030. Supply is there, but it's going to take time to ramp up the supply. So I think there's going to be a deficit in lithium for quite a few years. So that means elevated prices of lithium for longer.
The company is aiming to triple its production between now and the next five years. So that's also a strong growth. We think earning surprise and there's going to be a lot of cash flows. Capital management is also going to be featured here on this stock. So for us, earning surprise on price, volume, and capital management, it's a buy.
So far more optimism from Andre and Alphinity. It just goes to show that even expert investors don't always see eye to eye. But one thing's for sure. Pilbara will be an interesting company to watch over the next 12 months.
At the current Pilbara Minerals share price, this ASX 200 lithium stock has a market capitalisation of $7.96 billion.
