BHP
Note: This is a daily stock update and the information stands true as of 27/08/24, 09:00 CEST.
Company Update:
FY (end June) results came in better than expected. Sales reached $56bn (+3.4% yoy) while Operating profit grew 3.6% to $24bn. As expected, there was a sharp correction in Coal but Iron Ore and Copper provided a strong support. Net attributable profit was $7.9bn (-39%) – impacted by $2.7bn of impairments at Australian nickel operations and $3.8bn of charge associated with Samarco dam failure. The full-year dividend was $1.46/share (-14%) vs. AV expectation of $1.35/share.
Management has warned about Chinese recovery risks and the region’s steel market concerns – largely evident in the iron ore market sell-off. The company cut its short-term copper forecasts for copper as it expects lower demand from China (growth of 1% - 2% vs 6% in 2023) and now expects a slight surplus for 2025 but maintained its long-term bullish view on copper.
But we believe BHP is trading at very attractive levels, moreover since the sell-off when a mega-bid for Anglo’s shares was unveiled a few months ago.
Overall, our positive recommendation on BHP is reiterated. BHP’s shares in the Australian markets ended the day with c.2% gains.
Expert Opinion:
Short term pressure is likely to remain high as demand from China is subdued. However, over the medium term, we remain positive on the dynamics of many minerals, notably iron ore and copper. BHP offers a very attractive diversified profile, and the current share price is an opportunity to play a potential super cycle on minerals in the years to come. Stock trades on a PE 25 (June) of 10.6x
NOTE: This comes in a contrast with recent Glencore numbers. We have downgraded our estimates on Glencore (EPS 24 slashed by 10% and by 4% in 2025). Our NAV is roughly unchanged despite that short term cut. For more details on Glencore's change in estimates, visit- https://www.alphavalue.com/#trial
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
Company Update:
FY (end June) results came in better than expected. Sales reached $56bn (+3.4% yoy) while Operating profit grew 3.6% to $24bn. As expected, there was a sharp correction in Coal but Iron Ore and Copper provided a strong support. Net attributable profit was $7.9bn (-39%) – impacted by $2.7bn of impairments at Australian nickel operations and $3.8bn of charge associated with Samarco dam failure. The full-year dividend was $1.46/share (-14%) vs. AV expectation of $1.35/share.
Management has warned about Chinese recovery risks and the region’s steel market concerns – largely evident in the iron ore market sell-off. The company cut its short-term copper forecasts for copper as it expects lower demand from China (growth of 1% - 2% vs 6% in 2023) and now expects a slight surplus for 2025 but maintained its long-term bullish view on copper.
But we believe BHP is trading at very attractive levels, moreover since the sell-off when a mega-bid for Anglo’s shares was unveiled a few months ago.
Overall, our positive recommendation on BHP is reiterated. BHP’s shares in the Australian markets ended the day with c.2% gains.
Expert Opinion:
Short term pressure is likely to remain high as demand from China is subdued. However, over the medium term, we remain positive on the dynamics of many minerals, notably iron ore and copper. BHP offers a very attractive diversified profile, and the current share price is an opportunity to play a potential super cycle on minerals in the years to come. Stock trades on a PE 25 (June) of 10.6x
NOTE: This comes in a contrast with recent Glencore numbers. We have downgraded our estimates on Glencore (EPS 24 slashed by 10% and by 4% in 2025). Our NAV is roughly unchanged despite that short term cut. For more details on Glencore's change in estimates, visit- https://www.alphavalue.com/#trial
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
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Alphavalue Morning Market Tip
Solid start of 2025 with signs of recovery in key markets.