BHP Group's first quarter result outpaced expectations in both iron ore and copper, reports Morgans. Pilbara iron ore, Escondida and Olympic Dam beat the broker's estimates.
As a result, the analyst upgrades estimates for iron ore and Escondida volumes.
Management has shelved plans to expand Olympic Dam after drilling results failed to confirm earlier hopes.
Despite a drag from Olympic Dam, Morgans explains the Group still boasts a robust free cash flow yield of 9.2% and value upside.
The Add rating is unchanged and the target price is decreased to $39.40 from $39.70.
Target price is $39.40.Current Price is $35.90. Difference: $3.50 - (brackets indicate current price is over target). If BHP meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
© 2020 Acquisdata Pty Ltd., source FN Arena