Citi have revised dividends and price target slightly but still looking decent.
----------------------------------------------------------------------------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 changesCiti 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
BHP $100 Target !, page-233
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