Australian earnings preview – BHP

Australia

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

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