BHP – Morgans rates the stock as Add

The proposed merger of BHP Group’s Petroleum division and Woodside Petroleum ((WPL)) is now binding, but still requires Woodside shareholder approval. BHP will have to pay tax on the investment at end-FY22, Morgans notes, and dividends will drop on the lost revenue.

The broker now values BHP Petroleum in line with the merger ratio, increasing its value to US$21.9bn from US$15.5bn.

Target falls to $45.70 from $46.05, Add retained.

Sector: Materials.


Target price is $45.70.Current Price is $38.30. Difference: $7.40 – (brackets indicate current price is over target). If BHP meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).



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