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Analysts Say ‘Buy BHP,’ but What about Their Price Targets?


Jul. 27 2016, Updated 10:04 a.m. ET

Analysts’ recommendations

Among the analysts that track BHP Billiton (BHP) (BBL), 44% have given the company a “buy” recommendation, and 6% have given it a “sell” recommendation. For Rio Tinto (RIO), 43% of analysts are recommending a “buy” while 13% are recommending a “buy” for Vale (VALE).

In comparison, Freeport-McMoRan (FCX) and Alcoa (AA) have 15% and 41% “buy” recommendations, respectively. Freeport-McMoRan forms 3.6% of the SPDR S&P Metals and Mining ETF (XME).

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Changes in analyst ratings

Now let’s discuss some recent target prices and recommendations with respect to BHP. After BHP’s production report while several analysts commented on the results, there hasn’t been any change in the rating for the stock.

Macquarie reiterated its “underperform” rating on BHP on July 21, with a target price of 8.5 British pounds.

In addition, Barclays and JP Morgan & Co. also maintained their “equal weight” and “underweight” ratings, respectively, for the stock. They have target prices of 9.25 British pounds and 9.0 British pounds, respectively.

Changing sentiments

Since the beginning of the year, the number of “buy” ratings for BHP decreased by 30% while its “sell” ratings increased by 50%. Compared to other diversified miners, BHP’s significant exposure to energy prices (USO) (UCO) through its Petroleum division might have caused some analysts to turn bearish on the stock.


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