Down 20% in a month, is the Pilbara Minerals share price a buy?

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.

The Pilbara Minerals Ltd (ASX: PLS) share price has been on a downhill trajectory over the past month.

Despite travelling 3.56% higher to $2.62 today, the company’s shares have, in fact, plummeted 20% since 11 April.

Below, we take a look at what has happened to Pilbara Minerals shares and if they might present a buying opportunity.

What’s going on with Pilbara Minerals shares?

The Pilbara Minerals share price continued to power ahead from mid-March to April on the back of investor hype.

However, the recent turn of events, such as interest rate hikes and an expected global economic slowdown, likely triggered its downfall.

On most days, anywhere between 20 million and 35 million of the company’s shares are swapping hands. Between 5 May and yesterday, Pilbara Minerals saw up to 51.2 million shares being exchanged on any single day.

With no company announcements within the last two weeks, investor attention has been turned to the spot price for lithium. While the value of lithium carbonate has rocketed since this time last year, prices have gradually eased.

Currently, the battery-making ingredient is fetching 462,500 Chinese yuan per metric tonne. This represents a 4.15% decline over the past month.

In addition, turmoil across global markets has also played a part in the company’s share price.

What do the brokers think?

A couple of brokers weighed in on the Pilbara Minerals share price following the company’s financial scorecard in February.

Analysts at Macquarie slashed its 12-month price target by 5% to $3.50 for Pilbara Minerals shares.

Meantime, Citi also reduced its rating by 5.4% to $3.50.

Based on the current share price, Macquarie and Citi’s take implies a potential upside of 37% for investors.

About the Pilbara Minerals share price

Regardless of its recent declines, the Pilbara Minerals share price has more than doubled in value over the past 12 months.

The company’s shares reached an all-time high of $3.89 in mid-January before sharply pulling back to December 2021 levels.

On valuation grounds, Pilbara Minerals presides a market capitalisation of roughly $7.68 billion.

The post Down 20% in a month, is the Pilbara Minerals share price a buy? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Pilbara Minerals right now?

Before you consider Pilbara Minerals, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pilbara Minerals wasn’t one of them.

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*Returns as of January 13th 2022

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Motley Fool contributor Aaron Teboneras 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.

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