The Pilbara Minerals Ltd (ASX: PLS) share price finished Wednesday’s session up 1.29% to $5.50.

Just six months ago, the ASX lithium share was fetching just above $2.50. That’s right, the Pilbara Minerals share price is up an eye-watering 117% over this period. That’s just nuts.

Allow my Fool colleague Sebastian to blow your mind further. A bit over two years ago, Pilbara was a 30-cent share. So, it’s up more than 1,000% in two years.

But according to reporting in the Australian Financial Review (AFR), JPMorgan is neutral on Pilbara Minerals. And that’s an upgrade from its previous forecast.

The broker also has a 12-month share price target of $5.10 on Pilbara Minerals. Oops. Pilbara shares have already soared past that level.

So, has JPMorgan got it wrong?

Why is the Pilbara Minerals share price going gangbusters?

Well, there’s no doubt that lithium shares have got some great momentum right now. They continue to rise on the back of the surge in global electric vehicle (EV) manufacturing and there’s a long way to go.

In a recent investor presentation, Argo Investments Limited (ASX: ARG) demonstrated that global EV sales are expected to climb drastically from about six million in 2022 to 30 million in 2030.

This demand has, in turn, resulted in an astronomical increase in the lithium price, which means every company mining it has been raking in revenue like never before.

The lithium share price hit another record this month, and is up 3.49% over the past week to US$81,759 per tonne, according to Trading Economics.

What do other brokers think?

A quick canvas of recent broker commentary suggests that Pilbara Minerals is looked upon favourably as a business. No doubt, it’s benefitting enormously from the lithium price surge. The only ‘problem’ is the astronomical short-term share price gain, which has potentially made Pilbara Minerals too expensive now.

UBS and Credit Suisse have both slapped sell ratings on Pilbara Minerals shares. Their price targets imply a drop of at least 40%.

Citi has also put a sell on the stock on valuation grounds, saying the Pilbara Minerals share price has risen “too far, too fast.” Citi increased its share price target to $4.60.

Citi said: “[Pilbara Minerals] stock is up by 160% in a year, well ahead of peers; we move to Sell from Neutral on valuation.”

In a recent interview with my colleague Bernd, Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund said Pilbara Minerals “has been a longstanding favourite of ours“.

But he noted that the very strong share price gain meant “maybe some of the best returns are behind it”.

Rehder said:

The stock is up 50% this calendar year, after a 270% rise in 2021. So, maybe some of the best returns are behind it. But it continues to offer high-quality exposure to that green energy thematic, via its long-life, low-cost lithium mines in WA.

Wilsons equity strategist Rob Crookston said the team’s preference among ASX lithium shares is Allkem Ltd (ASX: AKE). They like Pilbara Minerals as well but also draw attention to the stretched valuation.

Crookston said: “While PLS screens attractively on near-term valuation multiples, the company appears to offer less valuation appeal over the medium-term.”

The post The Pilbara Minerals share price is up 117% in 6 months. So, does JPMorgan have it wrong? appeared first on The Motley Fool Australia.

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More reading

• Why did ASX lithium shares smash the market on Tuesday?
• Why did the Pilbara Minerals share price have such a cracker day?
• Here are the top 10 ASX 200 shares today  
• Here are the 3 most traded ASX 200 shares on Tuesday
• Here are the 3 most heavily traded ASX 200 shares on Monday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. 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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It was a great day for the All Ordinaries Index (ASX: XAO) this Wednesday. The All Ords ended up closing at 7,187.4 points, up a healthy 0.52% for the day.

But it was an even better day for quite a few All Ords shares. So let’s now go through three that have recorded new, 52-week and multi-year highs today.

3 All Ordinaries shares hitting multi-year highs today

QBE Insurance Group Ltd (ASX: QBE)

First up is QBE Insurance. QBE shares had a very strong start to the trading day, rising as high as $13.10 a share soon after market open. That was despite the QBE share price falling for most of the afternoon and finishing up at $12.92 by the end of the trading day.

That was despite no real news coming out of the insurance giant this Wednesday. $13.10 a share is QBE’s highest share price level since the pre-COVID highs of February 2020 when QBE was a $14 share.

Mader Group Ltd (ASX: MAD)

We had a rather strange day for this All Ords share. Mader Group started out strong this morning, rising to a new high of $3.85 after closing at $3.75 yesterday.

But investors seemed to have gotten cold feet over the rest of the day, with Mader Group finishing down by a meaty 3.7% at $3.61. Still, this is a new all-time record high for Mader, as well as a new 52-week high. All this despite no news out of the company whatsoever.

Mineral Resources Limited (ASX: MIN)

Last but certainly not least is All Ords mining company Mineral Resources. Mineral Resources had an exceptionally strong day. The company finished up at $82.70 a share this afternoon but rose as high as $83.07. Not only is that a new 52-week high for Mineral Resources, but another all-time record high.

Again, there is nothing out of the company itself. But lithium shares, of which Mineral Resources is often associated with, had a strong day overall as well.

The post 3 ASX All Ordinaries shares that hit multi-year highs today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today  
• 3 ASX All Ords shares cracking new 52-week highs on Tuesday
• Here are the top 10 ASX 200 shares today
• Why are ASX lithium shares smashing the market today?
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Mader Group Limited. The Motley Fool Australia has positions in and has recommended Mader Group Limited. 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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The Zip Co Ltd (ASX: ZIP) share price finished today’s trading session in the red, down 0.78% at 64 cents. In comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) was up 0.5% to 7,187 points.

Zip shares have dropped a hefty 58% since late July, underlining what has been a year from hell for Zip shareholders.

But at last week’s annual general meeting (AGM), CEO and managing director Larry Diamond sought to reassure those still invested in the ASX buy now, pay later (BNPL) provider.

Diamond said the company’s “refreshed strategy” of pivoting from growth to profit was working, and the future was bright.

In his AGM address, Diamond said the past 12 months had made it clear that “a focused, agile business, guided by its purpose and mission, can emerge stronger from challenging times”.

Zip to become ‘a very profitable business’

Diamond went on to explain how Zip could emerge stronger from these tough economic times:

We believe Zip’s differentiated business model will prove resilient in the current operating environment, when coupled together with our innovative products, and position us well to continue to grow market share.

We have simplified the business following adjustments to strategy, underlying monthly cash burn is
improving and we are well funded, with approximately $141 million in available cash and liquidity. We are confident that we have the balance sheet to fund the company through to cash EBTDA profitability.

We have clear medium term targets we are driving the business towards as we scale. Revenue as a percentage of TTV is targeted at 7.0% to 7.5%. Cost of sales as a percentage of TTV targeted at 4.0% to 4.5% and we expect to deliver a cash transaction margin of 2.5% to 3.0%.

He said achieving these targets would deliver “a very profitable business”.

As we reported last week, Zip expects to turn cash EBTDA (earnings before taxes, depreciation and amortisation) positive as a group in the first half of FY24.

The key to that is getting Zip’s United States business cash flow positive. Diamond said at the AGM he expected this to occur by the end of FY23.

The US market is ‘critical’ to success

Diamond told shareholders that building scale in Zip’s core markets was “critical” to the business’s future success and the primary reason why he relocated to the US recently. He added:

While our near-term focus on profitability has tempered our top-line growth rate, the continued growth of the business across key metrics in the face of external challenges, reflects the incredible opportunity that exists.

In the US, the addressable market is estimated to be over US$10 trillion and BNPL penetration is still
under 2%, including just 4% of e-commerce and 1% of in-store spend. This demonstrates the sheer size, and early stage of the BNPL opportunity that we are positioned to capture.

How is Zip overcoming inflation headwinds?

Diamond outlined how the company was dealing with rising inflation and interest rates. He said Zip was “well-placed with its unique product offering and business model … to deliver results despite challenging external conditions”.

With interest rates rising we are strongly focused on how we maintain margins in this environment. Our product construct and repayment velocity mean that the US business in particular is well-placed to
mitigate interest rate rises, with any 25 basis point rise in base rate only impacting cost of funds by ~2
basis points on a per transaction basis.

At a time of heightened inflation, we believe our product offering becomes even more important to consumers who are looking to manage their monthly cashflows … It’s also a real necessity for merchants to drive conversion at the checkout and we continue to deliver value by driving new and repeat customers and increased order values.

Zip provided an investor presentation at the meeting. The Zip share price is down 85% in the year to date.

The post Down 60% since late July, can Zip shares really ’emerge stronger from challenging times’? appeared first on The Motley Fool Australia.

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• These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
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Motley Fool contributor Bronwyn Allen has positions in ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. 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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The Sayona Mining Ltd (ASX: SYA) share price has dumped 33.78% of its value after reaching a high of 37 cents per share on 13 September.

Shares of the lithium producer closed Wednesday’s trade at 24.5 cents.

The S&P/ASX 200 Materials Index (ASX: XMJ) was easily the best-performing sector indices today, finishing up 2.47%.

Let’s cover some recent developments in Sayona’s fundamentals to see if we can piece together why its shares have been sold off.

What’s going on with Sayona shares?

Most recently, Sayona made the list as one of the top 10 most-shorted ASX shares with a short interest ratio of 8.9% when the article was published.

Some good news for the company came on 27 October, which is when the company released an update for its North American Lithium (NAL) operation in Quebec, Canada.

The update contained news that production at NAL will restart for the first quarter of 2023.

And then on 16 October, the Fool covered previous developments for Sayona. These included its pre-feasibility study for its Moblan Lithium Project, which is also located in Quebec.

Also, predicted price increases for lithium hydroxide and spodumene concentrate were anticipated to take hold in 2023 before levelling off and pulling back in 2024.

So, by most accounts, there has been nothing but good news to report on for Sayona. So why are its shares down by 33% in two months?

This question has been asked before. The most plausible explanation seems to be that investors have been selling shares to take profits from their investments. My colleague James noted this profit-taking at the start of October.

Sayona Mining share price snapshot

The Sayona Mining share price is up 88% year to date. That’s beating the S&P/ASX 200 Index (ASX: XJO) by a wide margin, down 6% over the same period.

The company’s market capitalisation is around $2.03 billion.

The post Why has the Sayona Mining share price dumped 33% in 2 months? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most traded ASX 200 shares on Wednesday
• Coles share price slips as boss says ‘best is still to come’
• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing
• Whitehaven share price dives 9% as floods hit guidance

Motley Fool contributor Matthew Farley 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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