This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Bullish bounce by shares after near 15% sell-off. Talk about fresh talks between US and China that could avoid more tariffs and/or a trade war. BHP also produces oil whose price is buoyed by supply side constraints (Iran, Hurricane). Very attractive 7.1% forward dividend yield.
Risks to BHP Billiton include a global trade war, an emerging markets crisis or anything that puts Chinese economic growth (and thus consumption of raw materials) at risk. A stronger USD makes dollar-denominated commodities more expensive to non-USD buyers. More equity market weakness would likely see risk assets like Miners shunned. Lastly, Broker downgrades.
Brokers/analysts are bullish on the shares with only 7% suggesting Sell and 85% suggesting upside to a consensus target of 1738p, well above the trendline of falling highs. With price targets so bullish, the 69% of Neutral brokers ratings could be encouraged to upgrade their ratings if the share price bounce persists.
Next Event: Q3 Operations Review, 17 Oct
Latest Broker 12-Month Consensus: 24% Buy, 69% Hold, 7% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | -5.8 | -10.1 | -12.7 | 5.8 | 6.0 | 53.8 | 44.2 | -17.5 | -20.7 |
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Prepared by Michael van Dulken, Head of Research