UBS assesses that investors are mostly in favour of a buyback, and predominantly an off-market buyback of ASX listed shares as this can be accomplished quickly. Some prefer an on-market buyback of LSE-listed stock because they believe this would be more supportive of the share price.
BHP has reached the lower end of its net debt target and has stated it plans to return all net proceeds from the sale of its onshore US assets to shareholders in a timely manner.
UBS notes that only 10-20% of those investors surveyed preferred a special dividend and around 10% preferred a combination of both buyback and special dividend. UBS maintains a Buy rating and $35.50 target.
Target price is $35.50.Current Price is $34.63. Difference: $0.87 – (brackets indicate current price is over target). If BHP meets the UBS target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).