BHP Group: Solid skew heading into results season

About the author:

Adrian Prendergast
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).

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