Australian earnings preview – BHP


Full Year Earnings Preview:

Mining and metals giant BHP Group Ltd (BHP) is a diversified natural resources company that sits among the world’s top producers of major commodities, including iron ore, metallurgical coal, and copper. BHP also has substantial interests in oil, gas, and energy coal.

A multinational and dual-listed company, BHP is headquartered in Melbourne, Australia, and is one of the largest listed companies on the ASX. BHP is due to report its full-year numbers on the 18th of August at 8.30 am AEST.

Despite the crippling impact of the coronavirus to global industries, BHP has benefitted from strong demand for iron ore from China following the government’s sizeable post-COVID-19 stimulus measures and supply disruptions in Brazil.

BHP's flagship Australian iron ore division shipped 77.04 million tons of iron ore, smashing its previous years export numbers in the three months to June 30. This sets the mining giant up for strong full-year underlying earnings of close to $U.S9.5 billion.

BHP’s full-year earnings are expected to remain broadly flat at around U.S$42.5bn in FY 20. Earnings per share are expected to be around 270 cents per share and BHP is estimated to pay a fully franked ~4.5% dividend.

Technically, BHP has overhead trendline resistance coming in at ~$40.50 drawn from the $42.33 high from July 2019. On the downside, dips have found good buying interest $36.50/$34.50 area. Given the strong reflation thematic currently running through markets, should the BHP price dip into the aforementioned band of support zone it would offer a buying opportunity.  

Australian earnings preview – BHP

Source Tradingview. The figures stated areas of the 7th of August 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.