BHP on the way down to 20 dollars, page-97

No comparison to bb- interests payments can be maintained with industry leading margins from operations .

In spite of the halving of both oil and iron ore from fy13/14, bhp is forecast to achieve net profit of ~7b, ebitda of 24.3b and eps of 1.45 usd in fy15. Recent price weakness reflects decrease of eps by ~40%, from fy14. I see good buying at present, revised deutsche price target of A$38.00.
Near term catalyst is South 32 demerger, possible iron ore rebound to ~75usd and possible oil recovery.

Even if oil sustains 40usd/ barrel bhp can still maintain dividend payout (5% yield) and interest payments. Forecast a decrease in capex spend too particularly on US shale assets. Increased competion by oil service providers, should see these costs fall.

Regards Michael/