Is it time for 'cashing in some gains' on Pilbara Minerals shares?

The pure-play lithium producer has seen a remarkable 12 months but could it be time to sell?

| More on:

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 shares have rocketed 125% in a year 
  • The company explores lithium from the Pilgangoora Project near Port Hedland 
  • This week Pilbara accepted a pre-auction offer of US$7,100 per dry metric tonne of spodumene concentrate 

The Pilbara Minerals Ltd (ASX: PLS) share price has exploded in the past year.

Shares in the pure-play lithium company have surged 125% in the last 52 weeks to $4.80 apiece as at Tuesday's market close.

So is now a good time to sell, or is it better to hold Pilbara Minerals shares?

A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.

Image source: Getty Images

Hold or sell?

Pilbara operates the Pilgangoora Project near Port Hedland in Western Australia. This is regarded as one of the biggest hard rock lithium deposits in the world.

Red Leaf Securities CEO John Athanasiou recently recommended investors "sell" Pilbara Minerals shares, citing the company's recent gains. Commenting on The Bull, he said:

The company's been benefiting from higher lithium prices.

In fiscal year 2022, the company generated sales revenue of $1.2 billion, a 577 per cent increase on the prior corresponding period. Investors may want to consider cashing in some gains.

Meanwhile, UBS recently rated the Pilbara share price as a sell with a $2.65 price target, my Foolish colleague Tristan reported.

On the flipside, Macquarie placed a $5.60 price target on Pilbara shares in September, as reported by my Foolish colleague James.

A recent federal government report forecasted lithium prices to rise in 2023 before easing in 2024.

In news on Tuesday, Pilbara updated investors on its latest Battery Material Exchange (BMX) auction. The company has accepted a pre-auction offer of US$7,100 per dry metric tonne (dmt) for a shipment of 5,000dmt of spodumene concentrate in mid-November.

Pilbara is also due to release a quarterly activities report next Tuesday.

Share price snapshot

Pilbara shares have soared almost 50% year to date, however, they are down 4% in the past week.

For perspective, the S&P/ASX 200 (ASX: XJO) has fallen 8% in the past year.

Pilbara has a market capitalisation of about $14.2 billion based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Materials Shares

Meeting taking place amongst members of a board.
Materials Shares

CFO quits within weeks as this ASX 200 stock keeps sliding. What on earth is going on?

IGO shares fall again as the new CFO exits within weeks.

Read more »

Two mining workers on a laptop at a mine site.
Materials Shares

Guess which ASX stock just came out of a trading halt and jumped 8% today

Tivan shares jump 8% after the release of the scoping study for Molyhil.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Materials Shares

Forget Lynas shares, this ASX rare earths stock could rise 75%

Bell Potter thinks this rare earths stock is cheap. Here's what it is saying.

Read more »

A smiling woman holds an arm in the air in triumph while also holding a graphic of a fully-charged battery in her other hand.
Materials Shares

PLS shares are flying again. Here's why they're near record highs

PLS shares are once again on the move.

Read more »

A man has a surprised and relieved expression on his face.
Materials Shares

Why is this ASX lithium share rocketing 57% today?

Merger plans are getting investors excited today.

Read more »

Two miners wearing hard hats shake hands over a business deal.
Materials Shares

This ASX lithium company's shares have jumped more than 50% on major merger news

The deal values this company at more than $1 billion.

Read more »

Worker in hard hat in front of pile of scrap metal.
Materials Shares

Why this $1.5 billion ASX stock is jumping 6% today

Production progress lifts IperionX shares in its latest quarterly update.

Read more »

Male building supervisor stands and smiles with his arms crossed at a building site with workers behind him.
Materials Shares

IperionX ramps up 24/7 titanium production in March 2026 quarterly update

IperionX ramps up continuous titanium production and lifts its cash balance, with customer programs progressing and strong US Government backing.

Read more »