Pilbara Minerals share price (ASX: PLS) hit a new 52 low today at $2.13, as the firm tries to reverse the bearish sentiment that has seen the stock drop 45.48% on a year-to-date basis. Lithium prices are largely responsible for the decline along with increasing production costs, as highlighted in Pilbara’s recent earnings report. Zooming out onto the 5 year chart tells a different story, with PLS gaining some 768%, but this will be of little comfort to those that have taken positions more recently.
A closer examination of the company’s latest earnings report reveals a 31% drop in revenues. This decline is due to decreases in lithium production, sales volumes, and the realized prices of their products. The combination of these factors has placed considerable pressure on the company’s financial performance and share value.
Analysts have earlier this year adjusted price targets, with Morgan Stanley’s increasing their mark to $2.95, coming on an equal weight rating. The price target matches that of JP Morgan, who revised down price, whilst upgrading the rating to Neutral. Neither firm was effusive in it’s commentary, but such has been the decline in PLS so far this year that the perceived targets remain a long way to the upside from current price action. Whether the company can get there or not without a boost in either China demand, or Lithium prices is another question.
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