Is Macquarie still recommending Pilbara Minerals shares as a buy?

Pilbara Minerals Ltd (ASX: PLS) shares closed in the red today, down 2.85% to $4.78 each, losing almost 11% over the past month.

However, this follows a stupendous run for the ASX lithium share. The Pilbara Minerals share price is up 72% over the past six months despite its recent pullback.

So, is this lithium share a buy? Or has it had its day for now with price weakness expected to continue?

What does top broker Macquarie think?

As my Fool colleague James reported yesterday, Macquarie recommends Pilbara as a buy with an outperform rating.

Following Pilbara Minerals' latest digital auction, the broker has retained its outperform rating with a 12-month share price target of $7.70. This implies a potential upside of 61% for buyers today.

But earlier in the week, we also reported that Macquarie has reduced its Pilbara Minerals holdings in its model portfolios.

So, what's going on?

Does Macquarie still like Pilbara Minerals shares?

Firstly, let us explain what a model portfolio is. Brokers publish these portfolios as a way of helping their clients keep their investments up-to-date and growing.

This saves clients the expense and inconvenience of having to check in with their brokers too often or having to ask their advice on every personal trade they want to make.

However, changes to model portfolios do not indicate an official buy, sell, or hold recommendation.

According to The Australian, Pilbara Minerals shares were among a bunch of other high-profile ASX 200 shares that were either kicked out of the model portfolios or reduced.

Among ASX mining shares, BHP Group Ltd (ASX: BHP) and South32 Ltd (ASX: S32) were kicked out and Pilbara Minerals was reduced. But it was only reduced a little bit — from the #1 spot in the 'growth' model portfolio to the #2 spot. Hardly a disendorsement.

So, essentially the answer to the question is, 'yes'. Macquarie is still recommending Pilbara Minerals shares as a buy.

Why did Macquarie reduce Pilbara shares in its model portfolio?

Macquarie's Matthew Brooks explained that the changes to the model portfolios were made to "reduce exposure to earnings risks, while still trying to minimise exposure to highly valued stocks".

And therein might lie two clues to Macquarie's slightly reduced model holding in Pilbara Minerals shares.

Firstly, "earnings risks".

Every commodity-linked ASX share has a degree of earnings risk when commodity prices are unusually high. And for the record, international lithium prices are sky-high. The price of lithium carbonate, for example, is up 200% year over year.

When commodity prices are historically high, miners make a fortune, and sometimes more money than they've ever made before. Case in point: The maiden profit reported by Pilbara for FY22 after 17 years of operations.

Secondly, "highly-valued stocks".

The Pilbara Minerals share price has never traded this high in the 12 years it's been listed on the ASX.

And even though Macquarie thinks it can go to $7.70 by this time next year, they could also be wrong.