All eyes will be on Pilbara Minerals Ltd (ASX: PLS) shares next week when the lithium miner releases its eagerly anticipated third-quarter update.

Ahead of the release on Friday of next week, let's now take a look at what the market is expecting from the company's report.

According to a note out of Goldman Sachs, its analysts are expecting Pilbara Minerals to report spodumene production of 173,000 tonnes. This will be down 1.7% quarter on quarter.

It is also a touch short of the consensus estimate of 177,000 tonnes of spodumene for the three months ended 31 March.

Goldman expects Pilbara Minerals to report spodumene sales volumes of 174,000 tonnes for the period, up 6.1% quarter on quarter. Once again, this is slightly lower than the consensus estimate of 180,000 tonnes.

While production and sales volumes are important, the biggest impact on Pilbara Minerals shares from this report is likely to come from the price it commands for its lithium.

Unfortunately, Goldman Sachs believes that the company will report another sharp decline in the average realised spodumene price.

For the three months, it is expecting an average price of US$869 per tonne. This is down 21.9% quarter on quarter and 82% year on year.

As with the other metrics, the broker's estimate is lower than consensus expectations. The market currently expects an average realised spodumene price of US$891 per tonne for the quarter.

One positive is that Goldman believes Pilbara Minerals will report a small reduction in its cash costs to A$630 per tonne. This is actually lower than the consensus estimate of A$666 per tonne.

As you might have guessed from its bearish view on both lithium prices and the company's operating performance, Goldman Sachs doesn't think investors should be buying Pilbara Minerals shares right now.

This week the broker has reiterated its sell rating with a lowly $2.90 price target. This implies a potential down of over 25% for investors. It explains:

We are Sell rated on: (1) Valuation: where PLS remains at a premium to peers (1.2x NAV & pricing ~US$1,265/t LT spodumene; peer average ~1.1x & ~US$1,250/t), with near-term FCF continuing to decline on lithium prices and increasing growth spend (c.-10% FCF yield in FY24E, and c.0% in FY25-27E) and a significant premium out to FY30E vs. peers on both EV/EBITDA and EV/Production on broadly normalised production/lithium prices; (2) Doubling production over 5 years with further optionality, though more than priced in, where we continue to see risk that a Beyond P1000 expansion disappoints vs. market expectations on a combination of capex, size, or timing (study expected Jun-24 Q), with a P1400 spend of ~A$0.85bn taking total capex spend over FY24-28E to ~A$3bn, ~A$0.9bn ahead of consensus which already prices further expansion; (3) Funded for further growth opportunities and ongoing capital management, though on more modest cash balance.