Macquarie make some changes to production forecasts for the US shale assets but as the changes are largely post FY22 there is only a modest impact on near-term earnings.
US onshore assets remain a key source of negative sentiment for BHP and the broker’s forecasts imply a return to cash consumption for the next two years. After factoring recent FX moves the Australian target price is unchanged at $29. Outperform retained.
Target price is $29.00.Current Price is $24.40. Difference: $4.60 – (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).