The Pilbara Minerals Ltd (ASX: PLS) share price has been in fine form in recent weeks.
Since this time last month, the lithium miner's shares have stormed 31% higher to $3.12.
Image source: Getty Images
Can the Pilbara Minerals share price keep rising?
The good news for investors is that the Pilbara Minerals share price rally may not be over just yet.
That's the view of one leading broker that has just bumped its price target materially higher from previous levels.
According to a note out of Citi, its analysts have retained their buy rating but lifted their price target by 40% to $3.60.
Based on the current Pilbara Minerals share price, this implies potential upside of 15% for investors over the next 12 months.
What did the broker say?
While Citi has reduced its FY 2022 earnings estimate to reflect the company's recent update, it has given its FY 2023 and FY 2024 estimates a major boost to reflect higher spodumene price assumptions.
The broker explained:
We update our model for the JunQ result and Citi's higher spodumene deck. JunQ nos were pre-released –see: Cash flows in JunQ. Capex for expansion gets front-end loaded — with new info definitive cash costs of US$462/t CIF ex royalties. FY23 guidance to come with the financial result in August. Key interest at the result will be on capital management; PLS ended JunQ with A$874.2m including letters of credit.
Our EBITDA reduces by 9% in FY22e to A$840m after updating for the result. However, EBITDA lifts materially in FY23e and FY24e given higher spodumene prices. NAV lifts ~16% to A$2.70/sh and our TP lifts 40cps to A$3.60/sh. We stay Buy rated here with expectations of +15% FCF in FY23e.
