The Pilbara Minerals Ltd (ASX: PLS) share price is having a difficult start to the week.
In early trade, the lithium miner's shares were down as much as 7.5% to $4.19.
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What's going on with the Pilbara Minerals share price?
Investors have been selling down the Pilbara Minerals share price amid broad weakness in the lithium industry today.
Concerns over falling lithium prices have seen fellow lithium miners such as Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO), and Mineral Resources Ltd (ASX: MIN) fall heavily along with Pilbara Minerals.
Is this a buying opportunity?
One leading broker that appears to see this as a buying opportunity for investors is Citi.
According to a note, the broker has responded to the company's half-year results by retaining its buy rating with a $4.80 price target. This suggests that Pilbara Minerals shares could rise almost 13% from current levels.
The broker notes that the company delivered a result in line with expectations and has upgraded its production guidance. It commented:
PLS reported after market. EBITDA of $1.81bn and NPAT of A$1.24bn inline with CitiE. Inaugural dividend of 11cps announced. As expected from the DecQ FY23 guidance has been lifted to 600-620kt (+50kt at the midpoint) and costs lowered to A$580-610/t FOB ex-royalty (down A$73/t at the midpoint).
No updates on FID status of P1000 expected in the MarQ. We remain Buy rated TP unchanged at A$4.80/shr.
Elsewhere, the team at Goldman Sachs isn't quite as positive and has a neutral rating on its shares. Though, interestingly, its price target of $4.90 is actually higher than Citi's and implies almost 14% upside for the Pilbara Minerals share price.
Nevertheless, Goldman continues to warn that lithium prices could fall materially in the near future. It commented:
We note the lithium chemicals spot and forward pricing has continued to decline, with our commodities team reiterating their expectation for lithium prices to decline from 2H23, supported by recent China trip feedback suggesting risk of higher than expected lithium supply.
In this context we would highlight that while some smaller hard rock projects are facing grade/volume issues and greenfield projects risk higher capex, the larger Australian spodumene projects already in operation across Pilgangoora, Greenbushes, and Wodgina have either recently outperformed production expectations (and increased near term production guidance) or lifted medium term production growth targets.
In this backdrop with FID for PLS' P1000 project expected in the coming weeks (Mar-23), project ramp up timing and capex spend will be the key focus, in our view.
