‘In harvest mode’: Why the Pilbara Minerals share price is rocketing 8% higher today

The Pilbara Minerals Ltd (ASX: PLS) share price is having a stellar finish to the week,

In morning trade, the lithium giant’s shares are up 8% to $4.35.

Why is the Pilbara Minerals share price rocketing higher?

Investors have been scrambling to buy this lithium miner’s shares following the release of its quarterly update.

That update was filled with positives, with production, sales volumes, lithium prices, and unit costs all heading in the right direction quarter on quarter.

For example, for the three months ended 31 December, Pilbara Minerals delivered a 10% quarter on quarter increase in spodumene concentrate to 162,151 dry metric tonnes (dmt) with a unit operating cost of A$579 per dmt.

The latter was down 5% from the previous quarter and is lower than its full year guidance range of A$635 to A$700 dmt.

And with the company benefiting from a combination of stronger market pricing and improved pricing outcomes with offtake customers, it reported spodumene concentrate sales of A$1.135 billion for the period.

This lifted the company’s cash balance from $1.375 billion at the end of September to A$2.226 billion at the end of December.

Broker response

Brokers have responded positively to the update. Macquarie, for example, notes that Pilbara Minerals’ production and shipments came in ahead of its estimates.

This has led to Macquarie reiterating its outperform rating and $7.50 price target. This implies potential upside of 72% for the Pilbara Minerals share price even after today’s solid gain.

Elsewhere, the team at Citi was also pleased with the company’s performance.

It believes that Pilbara Minerals will easily achieve its full year production guidance following the strong quarter. The broker also highlights the company’s impressive cash generation, commenting that it is “in harvest mode, banking another circa A$850 million.”

In response, the broker has retained its buy rating and lifted its price target to $4.80.

The post ‘In harvest mode’: Why the Pilbara Minerals share price is rocketing 8% higher today appeared first on The Motley Fool Australia.

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More reading

• My top predictions for ASX 200 mining shares in 2023
• Pilbara Minerals share price on watch following Q2 update
• 5 things to watch on the ASX 200 on Friday
• How much profit will Pilbara Minerals shares make in 2023?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor James Mickleboro 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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