Here is the Pilbara Minerals share earnings forecast for 2027

The Pilbara Minerals Ltd (ASX:PLS) share price has fluctuated significantly over the last few years. Just look at the chart below – it’s down about 20% in the last month alone.

Can the profit generated in the coming years translate into a revival of the lithium mine?

ASX mining stocks are highly exposed to commodity price movements in terms of generating profits and investor confidence.

Mining costs typically do not change significantly from month to month, or even year to year. Therefore, changes on the revenue side can significantly increase or decrease profitability.

The price of lithium has fallen over the past 18 months. In its quarterly update for the three-month period ending March 31, 2024, ASX lithium shares showed that the realized price of the commodity has declined by 28% since the quarter ending December 31, 2023.

What impact does this have on earnings estimates for the next few years as the price of lithium falls and remains low? Let’s see what one of the brokers thinks.

FY24 performance

Fiscal year 2024 is coming to an end and June is just a few weeks away. However, before the reporting season arrives in August, we will know the company’s financial reports for a few more weeks.

Broker UBS believes Pilbara Minerals will generate $353 million in net profit after tax (NPAT) in FY24, which could represent a reduction of $2 billion year-on-year.

UBS forecasts that the company’s net cash balance could fall to $936 million due to investments in the P680 and P1000 projects.

UBS believes the lithium price has stabilized at a level largely in line with Pilbara Minerals’ BMX auction result of $1,106 per tonne.

At the current share price, Pilbara Minerals is valued at 27 times estimated FY24 earnings.

What about FY25?

Weak conditions are expected to persist into fiscal 2025, according to UBS.

The broker expects ASX Lithium shares to generate $366 million in net profit in FY25, up $13 million from FY24.

UBS expects Pilbara Minerals to commit another A$680 million in investment in FY25 for P1000 growth.

The broker forecasts ASX share cash balance of A$1.25 billion at the end of FY25 and net cash balance of A$708 million.

Expectations regarding FY26

In FY2026, ASX Lith Share’s revenue could increase by approximately A$300 million, which could also help boost earnings before interest and tax (EBIT) by approximately A$300 million to A$826 million.

Pilbara Minerals is projected to generate net income of $543 million in fiscal year 2026, which would represent growth of 48% year-on-year, or $177 million in dollar terms.

The increased profit and elimination of P1000 capital expenditures could increase the net cash balance to $1.2 billion.

UBS also announced a dividend of 5 cents per share and earnings per share (EPS) of 18 cents.

Finally, here it is FY27 forecast

According to this series of forecasts, fiscal 2027 could be the best year yet.

Its revenue is forecast to rebound to nearly $2 billion, which could unlock $1 billion in EBIT.

UBS forecasts that Pilbara Minerals could achieve net profit after tax of $690 million in the 2027 financial year, which would represent year-on-year growth of 27%. If this happens, the broker anticipates that the company may declare an annual dividend per share of 9 cents.