Elevated iron-ore and coking coal spot prices look to support a earnings growth for BHP Group in the coming years according to Macquarie. The broker notes heightened pricing could drive a 64% and 147% increase to earnings forecasts for FY23 and FY24.
Elsewhere, further near-term cash outflow may be required for the Samarco project, with a proposal to cap repair costs at US$2.4bn likely requiring additional capital from BHP Group and its joint venture partner. BHP Group has contributed US$2.2bn in cash to date.
The Outperform rating and target price of $61.00 are retained.
Sector: Materials.
Target price is $61.00.Current Price is $52.44. Difference: $8.56 – (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
