BHP Group: Solid skew heading into results season

About the author:

Author name:

By Adrian Prendergast

Job title:

Senior Analyst

Date posted:

17 July 2023, 7:00 AM

Sectors Covered:

Mining, Energy

• In a sector battling volatile commodity prices and global inflationary pressures we see BHP Group (ASX:BHP) as offering the best risk-reward proposition in its sector.
• A special dividend looks unlikely with BHP digesting the US$7bn OZL acquisition this half. We expect net debt finished the year at ~US$12bn.
• We review our assumptions ahead of BHP’s June operational result on 20/07 and FY23 earnings result on 22/08, and include the OZL acquisition into our model.
• BHP’s Q4 op result will further steer our 2H’FY23 expectations. To that end we expect a healthy quarter in Pilbara shipments (key driver).
• OZL acquisition adds some value, but in particular it will help Olympic Dam returns look better.
• We maintain an ADD rating with an upgraded (login to view).

Find out more

If you would like more information, please contact your adviser or nearest Morgans office. 

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.