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Behind the Recent Analyst Changes for BHP Billiton

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BHP’s ratings

Of the 19 analysts covering BHP Billiton (BHP), nine analysts issued “buy” recommendations, eight gave “hold” recommendations, and two gave “sell” recommendations on the stock. The consensus target price for the company is $27.63, which implies an upside of 15.1% based on its current market price.

By comparison, the majority of analysts (70%) have rated Freeport-McMoran (FCX) as a “hold.” Teck Resources (TECK) has “buy” ratings from 84% of the analysts surveyed by Thomson Reuters. Glencore (GLNCY) has received “buy” ratings from 72% of its analysts.

Notably, analysts are bearish on Southern Copper (SCCO), with 40% of the analysts recommending a “sell.”

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Upgrades and downgrades

Citigroup (C) upgraded its iron ore price (XME) forecast 21.6% for 2017. Citigroup is also positive on the outlooks for oil, copper, and zinc in 2017. To reflect its positive stance, it has upgraded diversified miners such as BHP Billiton. On April 26, 2017, it upgraded BHP from “neutral” to “buy.”

Goldman Sachs (GS) downgraded BHP Billiton to “sell” from “neutral” on April 25. The firm now has a target price of 11.0 British pounds on the stock, down from its previous target of 14.0 British pounds.

CLSA upgraded BHP from “outperform” to “buy” rating on April 7.

On May 19, 2017, Jefferies cut BHP’s target price to 1,500 pence from 1,700 pence. Jefferies reaffirmed its “buy” rating on the stock, however. The decrease in its target price came as a result of Jefferies’ lower earnings estimates for BHP, having changed its earnings per share expectation to $2.75 for 2017, down from the previous forecast of $2.77.

Target price changes

The recent changes to BHP Billiton’s target prices are as follows:

  • J.P. Morgan cut BHP’s target price from 1,300 pence to 1,265 pence on March 7, 2017. The firm has an “underweight” rating on the stock.
  • UBS raised its target price from 1,350 pence to 1,400 pence on February 22, 2017. It reiterated its “neutral” rating on the stock.
  • HSBC reaffirmed its “hold” rating for BHP while cutting its TP from 1,550 pence to 1,500 pence on February 22, 2017.
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