The 1QFY17 production result for BHP was weaker than the market had expected. Weather related issues were mainly the cause.
BHP maintained FY17 shipping guidance for Iron Ore at 265-275mt. Petroleum volumes are anticipated to improve in the year ahead following recent issues with weak production from the Gulf of Mexico assets and lower shale volumes.
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Forecast FY17 revenue to be in the range of $35b, EBIT of $7b, DPS of $0.50, which places the stock on a forward yield of 3%.
Many analysts have a bearish outlook for commodity prices in Fy18 and as a consequence, lower forecast EPS and DPS for the majors. Our view differs slightly and we think any pullback early next year will most likely create a solid “buy on the dip” opportunity for both BHP and RIO.
Our algorithm engines will track these and other major resource names for potential entry conditions.
BHP.ASX
