The EPS to look out for will come in the February 2010 half yearly results.
50% drop in coal prices and 35% drop in iron ore prices will be fully factored in.
The EPS may fall under $2 annually or under $1 for the half.
Therefore, at the current $38 share price, the PE ratio moves up to 19 on $2 EPS and 20 on $1.90 EPS.
However, the experts are more bullish than me, as follows:
Plus BHP has $10B in cash and very low debt, so they are looking to make some EPS accreditive acquistions.
In brief, $17 is too low. Maybe $28.
Citi rates BHP as Buy, Medium Risk - It was a "solid result" says Citi, who notes that net profit and earnings were both ahead of it and consensus. However, the flat dividend was somewhat of a minor disappointment. Still, the broker sees about 30% upside risk to its FY10 estimates at spot metal prices and a rollover for bulk prices. This view, coupled with strong expected production growth, sees the broker maintain its Buy rating and target price.
Target price is $40.00 Current Price is $37.99 Difference:$2.01 - (brackets indicate current price is over target). If BHP meets the Citi target it will return approximately 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June. Citi forecasts a full year FY10 dividend of 123.05 cents and EPS of 221.49 cents. At the last closing share price the estimated dividend yield is 3.24%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.15.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values. Market Sentiment: 0.3
Deutsche Bank rates BHP as Hold - On first pass the broker suggests the BHP result was "very good", exceeding profit expectations with copper surprising to the upside. Already strong cashflow rose 6% from last year to a new record, while gearing dropped to 12%. Management reiterated a subdued outlook but noted emerging markets other than just China are showing positive signs. The broker would like to know just what BHP plans to do with all its cash.
No changes to the numbers just yet.
Target price is $36.04 Current Price is $37.99 Difference:($1.95) - (brackets indicate current price is over target). If BHP meets the Deutsche Bank target it will return approximately - 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June. Deutsche Bank forecasts a full year FY10 dividend of 114.85 cents and EPS of 240.63 cents. At the last closing share price the estimated dividend yield is 3.02%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.79.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values. Market Sentiment: 0.3
JP Morgan rates BHP as Neutral - Target $31.46 (was $30.38). Underlying earnings of US$10.7bn for the full year was a strong result in the broker's view as it had forecast a result of US$10.1bn. Post the result the broker retains its view the company is the best placed in its sector to benefit from any economic recovery but it continues to see this as priced in at current levels, meaning no change to its Neutral rating despite an increase in price target (which remains well below the current share price).
Target price is $31.46 Current Price is $37.99 Difference:($6.53) - (brackets indicate current price is over target). If BHP meets the JP Morgan target it will return approximately - 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June. JP Morgan forecasts a full year FY10 dividend of 139.46 cents and EPS of 214.52 cents. At the last closing share price the estimated dividend yield is 3.67%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.71.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values. Market Sentiment: 0.3
RBS Australia rates BHP as Hold - Target $36.93 (was $36.43). Underlying earnings for FY09 of US$10.7bn was better than the broker had expected and in its view its forecasts were at the top of the market. Post the result the broker makes only minor changes to its forecasts and retains its Hold rating on the stock.
Target price is $36.93 Current Price is $37.99 Difference:($1.06) - (brackets indicate current price is over target). If BHP meets the RBS Australia target it will return approximately - 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June. RBS Australia forecasts a full year FY10 dividend of 113.48 cents and EPS of 229.70 cents. At the last closing share price the estimated dividend yield is 2.99%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.54.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values. Market Sentiment: 0.3
UBS rates BHP as Neutral - The result was largely in line with the broker’s forecasts, although underlying profit was higher than UBS and the market had expected. Lower realised iron ore prices and higher iron ore costs see UBS cutting its FY10 earnings forecasts by 2% and FY11 also by 2%.
Maintenance of BHP’s dividend policy is seen as a key positive compared to its global peers, with UBS raising its target by $1.00 to $38.00.
BHP is well placed for organic growth as well as acquisitions, UBS adds.
Target price is $38.00 Current Price is $37.99 Difference:$0.01 - (brackets indicate current price is over target). If BHP meets the UBS target it will return approximately 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June. UBS forecasts a full year FY10 dividend of 118.95 cents and EPS of 225.60 cents. At the last closing share price the estimated dividend yield is 3.13%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.84.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values. Market Sentiment: 0.3
BHP Price at posting:
$38.26 Sentiment: Sell Disclosure: Not Held
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