BHP $100 Target !, page-233

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 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