GS with $49 targetBHP GROUP LIMITEDGoldman Sachs rates ((BHP))...

GS with $49 target

BHP GROUP LIMITED

Goldman Sachs rates ((BHP)) as Buy (1) -

Goldman Sachs reinstates coverage of BHP Group, considering its share to be attractively priced, citing robust free cash flow and growth potential in the copper sector.

BHP is expected to generate significant EBITDA from copper, with forecasts showing an increase to US$11.5bn in FY25. The broker appreciates the company's optionality from its US$20bn copper pipeline but observes its production and valuation lag that of Rio Tinto ((RIO)).

Financial forecasts have been adjusted, with EPS for FY24 revised to US$2.58 and FY25 to US$2.28. The broker remains optimistic about BHP’s ongoing superior margins and operating performance, particularly in the Pilbara iron ore sector.

Buy, alongside a 12-month price target of $49.00.

This report was published on June 12, 2024.

Target price is $49.00 Current Price is $43.50 Difference: $5.5
If BHP meets the Goldman Sachs target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $45.06, suggesting upside of 4.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 216.36 cents and EPS of 393.11 cents.
At the last closing share price the estimated dividend yield is 4.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 349.1, implying annual growth of N/A.
Current consensus DPS estimate is 232.3, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 12.4.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 191.99 cents and EPS of 347.40 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 423.4, implying annual growth of 21.3%.
Current consensus DPS estimate is 253.8, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 10.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources