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BHP Group Ltd BHP

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Morningstar’s Analysis

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BHP Meets Third-Quarter Fiscal 2021 Expectations; AUD 37 FVE Retained

Analyst Note

| Mathew Hodge, CFA |

No-moat BHP Group’s third-quarter fiscal 2021 update was in line with our expectations. Iron ore production slowed relative to the previous quarters with the normal wet season. Nonetheless, BHP is on track to meet guidance for record output amidst booming prices fuelled by disrupted supply and China’s significant fixed asset investment. We maintain our fiscal 2021 forecast for BHP to ship 254 million tonnes of iron ore, 1% up on last year. Stronger performance at Escondida, with costs and volumes tracking better than expected, offset some weakness elsewhere. The change drives a 1% increase in our fiscal 2021 adjusted earnings forecast to USD 3.60 per share but is not sufficient to change our AUD 37 per share fair value estimate. BHP lowered its metallurgical coal guidance, though we had already anticipated lower volumes.

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Company Profile

Business Description

BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. A 2001 dual-listed merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018.

Contact
171 Collins Street, Level 18
Melbourne, VIC, 3000, Australia
T +61 396093333
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Jun 30, 2021
Stock Type
Employees 31,589