BHP 2.16% $42.06 bhp group limited

BHP $100 Target !, page-233

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    Citi have revised dividends and price target slightly but still looking decent.


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    New forecasts

    Citi revised its outlook for BHP's dividend payout ratio to 52% on Thursday, and cut its FY24-25 dividend forecasts by 9% and 16% respectively. The key drivers behind this include:

    • Modestly higher assumed opex and material capex uplift in FY25 (US$9.8bn) and FY26 (US$10.7bn) compared to US$9.3 billion in FY24

    • Costs associated with Nickel West (EBITDA loss of US$300 million in FY24 as well as previously announced non-cash impairment charge of US$3.5 billion)

    • Additional redundancy and closure costs associated with Nickel West could amount to an additional US$0.9 billion

    • Downgrades to FY25-26 iron ore and copper earnings assumptions (modest 1-2% lower than previous forecasts)

    • Downgrades to FY25-26 coal earnings assumptions (down 11-17% compared to previous forecasts).


    The broker now expects BHP to deliver the following dividends:


    Old

    New

    % Chg

    FY24 (US cps)

    153

    139

    -9%

    FY25 (US cps)

    183

    154

    -16%

    FY26 (US cps)

    175

    154

    -12%



    Ratings changes

    Citi maintained a Buy rating on BHP, citing a positive outlook for copper prices, despite lowering its target price from $48.50 to $47.50.


    marketindex.com.au/news/why-bhps-dividend-outlook-was-downgraded-by-analysts

    Last edited by Tradinator: 18/07/24
 
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