BHP: RBC downgrades to 'underperform'
(CercleFinance.com) - RBC Capital Markets has downgraded its rating on BHP from "sector perform" to "underperform", cutting its corresponding target price from 1,375 pence to 1,325 pence, citing a valuation disconnect versus peers.
While the broker says BHP's decision to exit the US onshore business is a "positive", RBC thinks that poor capital allocation from the past cycle will keep on weighing on the miner.
"BHP's mature asset base, especially in petroleum creates medium-term pressure on profitability," RBS points out, insisting that that BHP should not be trading at a premium.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
While the broker says BHP's decision to exit the US onshore business is a "positive", RBC thinks that poor capital allocation from the past cycle will keep on weighing on the miner.
"BHP's mature asset base, especially in petroleum creates medium-term pressure on profitability," RBS points out, insisting that that BHP should not be trading at a premium.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.