BHP - BHP Group
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michael_selway
Coal & Phosphate, thats it!
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nizar said:I think BHP has a beautiful mix of commodities.
Uranium + Oil = u cant go wrong if u look at things a bit more longer term...
Longer term both of those 2 shoudl go down? only ST to MT they go up?
also whats the % of those 2 do they sell compared with the otehr comoodities
thx
MS
MS,
Why dont u think uranium and oil will be wont be worth much more in the longer term (say 10years)?
Saudi only has 10years of oil reserves left by its own (probably optimistic) measure.
U think nonconventionals (tar sands, oil shale) can be extracted on a commercial basis by then? I dont think so personally.
Well i guess if thats your thinking then its a valid point. But barring any massive discovery, which there hasnt been since the 1970s, in 10 years time, oil will be much more scarce than it is today.
Have a read of Jeremy Leggets "Half Gone" - he interviews Matthew Simmons and the worlds best authorities on oil and peak oil theory - Big Oil executives, government officials and much more. He spells it all out there.
Higher oil prices only make uranium more viable. It provides already a large % of the energy required to many european countries. India and China are planning many more reactors.
Or are u one of those who thinks uranium will be eclipsed by thorium?
We are several several years away from that happening IMO...
I think many of us are underestimating the spike in the uranium price that will occur in the next few years. This is only the beginning.
Why dont u think uranium and oil will be wont be worth much more in the longer term (say 10years)?
Saudi only has 10years of oil reserves left by its own (probably optimistic) measure.
U think nonconventionals (tar sands, oil shale) can be extracted on a commercial basis by then? I dont think so personally.
Well i guess if thats your thinking then its a valid point. But barring any massive discovery, which there hasnt been since the 1970s, in 10 years time, oil will be much more scarce than it is today.
Have a read of Jeremy Leggets "Half Gone" - he interviews Matthew Simmons and the worlds best authorities on oil and peak oil theory - Big Oil executives, government officials and much more. He spells it all out there.
Higher oil prices only make uranium more viable. It provides already a large % of the energy required to many european countries. India and China are planning many more reactors.
Or are u one of those who thinks uranium will be eclipsed by thorium?
We are several several years away from that happening IMO...
I think many of us are underestimating the spike in the uranium price that will occur in the next few years. This is only the beginning.
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nizarnizar said:I think BHP has a beautiful mix of commodities.
Uranium + Oil = u cant go wrong if u look at things a bit more longer term...
Agree wholly.
Now is the time to re-enter BHP with confidence.
I think $30 before Xmas is likely.
$40 in 2007 - maybe.
I think $35 is more probable.
However, if oil prices take a drive north again, a new ball game.
GreatPig
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Uranium will always be an after-thought for BHP.
From the June 2006 numbers in the earnings preso you can find the following attribution of the $15 USD Billion EBIT:
http://www.bhpbilliton.com/bbContentRepository/2006830445271/bhpbprelimpresentationaug06.pdf
Base Metals (copper and moly) $5.4 bn
Oil and Gas $3.0 bn
Aluminium $1.1 bn
Iron Ore and Coking Coal $4.5 bn
Stainless (Nickel) $0.9 bn
Thermal Coal $0.3 bn
Diamonds and Other (U) $0.3 bn
The copper price is well above the 2006 average
The Nickel price is in the stratosphere
Iron has gone up and looks set to roll again
Coal off a bit - but hard coking still looks amazingly strong
Even aluminium is holding up
The oil and gas business for BHP is a volume growth story
Hopefully the Yanks get nervous around the next quarterly production report (Escondida effect, Ravensthorpe blow outs etc) and give us another rolled gold opportunity below $26.00
The Yanks are still underweight and covering. Hills have gone up a couple of times this week on down nights on the LME, even after weak leads from London.
Anybody see the Goldmans note commenting on RIO being too cheap and open to a bid?!?!?!?!?
Oh my...
From the June 2006 numbers in the earnings preso you can find the following attribution of the $15 USD Billion EBIT:
http://www.bhpbilliton.com/bbContentRepository/2006830445271/bhpbprelimpresentationaug06.pdf
Base Metals (copper and moly) $5.4 bn
Oil and Gas $3.0 bn
Aluminium $1.1 bn
Iron Ore and Coking Coal $4.5 bn
Stainless (Nickel) $0.9 bn
Thermal Coal $0.3 bn
Diamonds and Other (U) $0.3 bn
The copper price is well above the 2006 average
The Nickel price is in the stratosphere
Iron has gone up and looks set to roll again
Coal off a bit - but hard coking still looks amazingly strong
Even aluminium is holding up
The oil and gas business for BHP is a volume growth story
Hopefully the Yanks get nervous around the next quarterly production report (Escondida effect, Ravensthorpe blow outs etc) and give us another rolled gold opportunity below $26.00
The Yanks are still underweight and covering. Hills have gone up a couple of times this week on down nights on the LME, even after weak leads from London.
Anybody see the Goldmans note commenting on RIO being too cheap and open to a bid?!?!?!?!?
Oh my...
BSD said:
Right now yeh, but Not after 2013 when the OD expansions kick in.
40,000tonnes/pa will make them a major player. It will also make up a much bigger chunk of their profits. Thats 88million pounds a year. Margin of us$50/lb gives EBIT of us$4.4billion
And thats just on todays prices (costs about us$12/lb).
Yeh the Yanks see BHP as mainly an oil company
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Interesting - can you link me to something on this?
Making some rough calcs, the information I have at hand has Olympic Dam going from 200,000tn to 500,000 tn of Cu per annum at a reserve grade of around 1.5% Cu. The Cu expansion alone could be generating another USD$1.3bn of cash flow
The U grade is about 0.06% and on my back of envelope this would mean U output would be going to around 20,000tn pa. This paper says 15,000tn is the target of the expansion.
http://www.dpmc.gov.au/umpner/submissions/223_sub_umpner.pdf
Still amazing numbers though
Interesting to see how the U price holds up with all the new supply coming on line from Olympic Dam and growth projects in Australia and Africa. U is a pretty common substance at $50lb
RioTinto certainly dont use a price anywhere near $25lb (let alone $50lb) in their forecasts.
Olympic Dam produced 9% of the world's U production in 2005, so tripling output will certainly have an effect on supply.
The table I put together in my last post was slightly incorrect. U is reported in the base metals division, not specialties.
Last year U production was 4,000 tonnes
Making some rough calcs, the information I have at hand has Olympic Dam going from 200,000tn to 500,000 tn of Cu per annum at a reserve grade of around 1.5% Cu. The Cu expansion alone could be generating another USD$1.3bn of cash flow
The U grade is about 0.06% and on my back of envelope this would mean U output would be going to around 20,000tn pa. This paper says 15,000tn is the target of the expansion.
http://www.dpmc.gov.au/umpner/submissions/223_sub_umpner.pdf
Still amazing numbers though
Interesting to see how the U price holds up with all the new supply coming on line from Olympic Dam and growth projects in Australia and Africa. U is a pretty common substance at $50lb
RioTinto certainly dont use a price anywhere near $25lb (let alone $50lb) in their forecasts.
Olympic Dam produced 9% of the world's U production in 2005, so tripling output will certainly have an effect on supply.
The table I put together in my last post was slightly incorrect. U is reported in the base metals division, not specialties.
Last year U production was 4,000 tonnes
Sean K
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BSD said:
Gents, thanks for the analysis and discussion here. I still note most analysts have around $35 and $100 one year targets on BHP and RIO. Looks like people are pretty bullish on the run home to Xmas. Can't see BHP being under $26 again, from here, but if it is, looks cheap. Interesting note on RIO being a potential target. That would be a lot to swollow. Who would have the cash for that apart from BHP?
There are some private equity guys in the U.S. with equity of more than $100million. Somebody told me that at a time when i was convinced BHP would be too large for someone to buy - apparently not.kennas said:
BHP some of parts would be worth at least $40/share. That certainly looks attractive on paper.
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BHP, Copper and Nickel up 4% o/n
Watching the macro momentum players covering their shorts is exciting !
Watching the macro momentum players covering their shorts is exciting !
Sean K
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ABN Amro rates the stock as Buy - The broker notes the Q1 production result was in line with expectations but failed to impress as the company continues to find it difficult to lift volumes.
Following the result the broker has cut its earnings forecast for FY07 by 2% to US$13,119m as it expects an improvement in subsequent quarters.
Valuation is $20.74.
Target price is $34.00 Current Price is $27.52 Difference:$6.48 - (brackets indicate current price is over target). If BHP meets the ABN Amro target it will return approximately 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Credit Suisse rates the stock as Outperform - The broker saw the quarterly production result as reasonable as the company''s key divisions performed as expected.
In the broker''s view the key short-term driver of the stock remains commodity prices, which it notes offer some upside to forecasts given current spot prices.
There is no change to its positive view.
Target price is $37.58 Current Price is $27.52 Difference:$10.06 - (brackets indicate current price is over target). If BHP meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Deutsche Bank rates the stock as Buy - The broker was disappointed with base metal production levels and is reviewing the numbers.
Target price is $32.60 Current Price is $27.52 Difference:$5.08 - (brackets indicate current price is over target). If BHP meets the Deutsche Bank target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
JP Morgan rates the stock as Overweight - Poor production levels mean the broker is maintaining Overweight based on higher prices and not on higher volumes.
Target price is $35.00 Current Price is $27.52 Difference:$7.48 - (brackets indicate current price is over target). If BHP meets the JP Morgan target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Macquarie rates the stock as Outperform - Poor production levels just go to highlight supply constraints, the broker says, which can only place upward pressure on commodity prices. BHP is cheap, the broker yells.
Target price is $32.55 Current Price is $27.52 Difference:$5.03 - (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Merrill Lynch rates the stock as Buy, Medium Risk - Q1 production was as expected, with oil and coal coming under pressure. The broker is maintaining a Buy rating, but suggests "trimming" positions in a Dec quarter rally ahead of adverse effects of US slowing in early 2007.
Target price is $35.00 Current Price is $27.52 Difference:$7.48 - (brackets indicate current price is over target). If BHP meets the Merrill Lynch target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).
SB Citigroup rates the stock as Buy, Medium Risk - The broker suggests the quarterly production report was broadly as it had expected, though coking coal was somewhat disappointing and diamond production was lower than forecast.
It sees upside risk to earnings forecasts given commodity prices remain strong, as on current spot prices the broker''s FY07 forecast would increase by 7% to US$15.5bn and in FY08 by 43% to US$16.8bn.
Target price is $37.00 Current Price is $27.52 Difference:$9.48 - (brackets indicate current price is over target). If BHP meets the SB Citigroup target it will return approximately 34% (excluding dividends, fees and charges - negative figures indicate an expected loss).
UBS rates the stock as Buy 2 - Quarterly production was weaker than expected, leading to a 4.2% earnings reduction, but you''d have to go a long way to find someone who would downgrade BHP. For the record, the broker prefers RIO at the moment.
Target price is $36.50 Current Price is $27.52 Difference:$8.98 - (brackets indicate current price is over target). If BHP meets the UBS target it will return approximately 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Following the result the broker has cut its earnings forecast for FY07 by 2% to US$13,119m as it expects an improvement in subsequent quarters.
Valuation is $20.74.
Target price is $34.00 Current Price is $27.52 Difference:$6.48 - (brackets indicate current price is over target). If BHP meets the ABN Amro target it will return approximately 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Credit Suisse rates the stock as Outperform - The broker saw the quarterly production result as reasonable as the company''s key divisions performed as expected.
In the broker''s view the key short-term driver of the stock remains commodity prices, which it notes offer some upside to forecasts given current spot prices.
There is no change to its positive view.
Target price is $37.58 Current Price is $27.52 Difference:$10.06 - (brackets indicate current price is over target). If BHP meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Deutsche Bank rates the stock as Buy - The broker was disappointed with base metal production levels and is reviewing the numbers.
Target price is $32.60 Current Price is $27.52 Difference:$5.08 - (brackets indicate current price is over target). If BHP meets the Deutsche Bank target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
JP Morgan rates the stock as Overweight - Poor production levels mean the broker is maintaining Overweight based on higher prices and not on higher volumes.
Target price is $35.00 Current Price is $27.52 Difference:$7.48 - (brackets indicate current price is over target). If BHP meets the JP Morgan target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Macquarie rates the stock as Outperform - Poor production levels just go to highlight supply constraints, the broker says, which can only place upward pressure on commodity prices. BHP is cheap, the broker yells.
Target price is $32.55 Current Price is $27.52 Difference:$5.03 - (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Merrill Lynch rates the stock as Buy, Medium Risk - Q1 production was as expected, with oil and coal coming under pressure. The broker is maintaining a Buy rating, but suggests "trimming" positions in a Dec quarter rally ahead of adverse effects of US slowing in early 2007.
Target price is $35.00 Current Price is $27.52 Difference:$7.48 - (brackets indicate current price is over target). If BHP meets the Merrill Lynch target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).
SB Citigroup rates the stock as Buy, Medium Risk - The broker suggests the quarterly production report was broadly as it had expected, though coking coal was somewhat disappointing and diamond production was lower than forecast.
It sees upside risk to earnings forecasts given commodity prices remain strong, as on current spot prices the broker''s FY07 forecast would increase by 7% to US$15.5bn and in FY08 by 43% to US$16.8bn.
Target price is $37.00 Current Price is $27.52 Difference:$9.48 - (brackets indicate current price is over target). If BHP meets the SB Citigroup target it will return approximately 34% (excluding dividends, fees and charges - negative figures indicate an expected loss).
UBS rates the stock as Buy 2 - Quarterly production was weaker than expected, leading to a 4.2% earnings reduction, but you''d have to go a long way to find someone who would downgrade BHP. For the record, the broker prefers RIO at the moment.
Target price is $36.50 Current Price is $27.52 Difference:$8.98 - (brackets indicate current price is over target). If BHP meets the UBS target it will return approximately 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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Get a stockbroker
Sean K
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dallee said:
I just made it al up dallee to get people to buy BHP and push up my stock.
You get this sort of stuff on fnarena. I don't think they would like what I have done above, but hey, I just like sharing information.
michael_selway
Coal & Phosphate, thats it!
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legs said:
the boom is not over but the high prices are
BHP sells coal, iron ore, steel, copper, aluminium the most i think
and prices for those have peaked or about to peak
thx
MS