In the wake of Albemarle's rejected takeover bid for Liontown Resources ((LTR)), Morgans sees potential for Pilbara Minerals to also become a takeover target due to its exposure to high quality hard rock.

Pilbara Minerals remains one of the few independent lithium producers with a globally significant resource, points out the analyst, allowing an acquirer immediate exposure to spodumene and hydroxide.

While the broker sees value in the Lithium sector, it cautions shorter-term traders that lithium price weakness continues, particularly in Chinese carbonate prices.

The $5.30 target and Add rating are retained and the stock becomes the broker's key pick of the pure plays in the sector.

Sector: Materials.

Target price is $5.30.Current Price is $3.99. Difference: $1.31 - (brackets indicate current price is over target). If PLS meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2023 Acquisdata Pty Ltd., source FN Arena