Morgans assesses a good end to FY21 for BHP Group, with solid performances from iron ore, petroleum and metallurgical coal for the fourth quarter. It’s felt tight labour market conditions were well navigated in WA, given unit cost guidance was maintained for iron ore.
The company achieved FY21 guidance across its business, while petroleum volumes were slightly ahead and unit costs below guidance, explains the broker.
While the group’s elevated share price appears justified, given the strength of its high quality earnings, the return does appear limited to its attractive dividend profile, notes the analyst. Morgans retains its Hold rating and lowers its target price to $44.70 from $45.80.
Target price is $44.70.Current Price is $49.24. Difference: ($4.54) – (brackets indicate current price is over target). If BHP meets the Morgans target it will return approximately -10% (excluding dividends, fees and charges – negative figures indicate an expected loss).