A Look at Recent Upgrades and Downgrades for BHP Billiton


Jan. 16 2018, Published 11:05 a.m. ET

BHP Billiton’s ratings

The majority of ratings for BHP Billiton (BHP) are “buys,” with 61% of analysts recommending as much on the stock. Of the 18 analysts covering BHP, 28% recommend “holds,” while the remaining 11% rate the stock as a “sell.”

The consensus target price for BHP is $30.0, which implies a potential downside of -3.1% based on its current market price. Like BHP, its peers (XME) Vale SA (VALE), Cleveland-Cliffs (CLF), and Freeport-McMoran (FCX) also have current potential downsides based on their respective target prices.

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JPM upgrades BHP

BHP’s most recent rating change came from JPMorgan Chase (JPM), which upgraded the stock from an “underweight” to a “neutral” on December 14, 2017. JPM analyst Fraser Jamieson sees a potential upside for the stock on the possible sale of its US onshore oil and gas operations. At the same time, he’s cautious about the practical challenges related to the asset disposal. He believes that BHP’s valuation is in-line with those of its comparable peers.

Other upgrades and downgrades

On January 1, 2018, Cowen raised BHP’s target price from $45 to $52 following a model update. The company maintained its “market perform” rating on the stock.

On September 7, 2017, Exane BNP Paribas downgraded the stock to an “underperform” from a “neutral.”

Raymond James Financial also downgraded BHP to an “underperform” from a “market perform” on September 1, 2017.

Just one day prior to Raymond James’s rating, RBC (Royal Bank of Canada) Capital Markets also downgraded BHP from a “sector perform” to an “underperform.” RBC analyst Tyler Broad was mainly concerned about BHP’s maturing asset base, which could affect its profitability in the medium term.

Broad also believes that the inability of miners (XME) to find acceptable places to justify their free cash flow and management time are a concern. He feels that this is also true of BHP.


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