BHP Inc(BHP:NYSE) Jefferies upgrades on valuation

STA Research
by: STA Research

Jefferies analyst Christopher LaFemina upgraded the firm’s rating on BHP Inc to Buy from Hold. The analyst raised his FTSE listed target to 2220 GBP from 1750GBP.

LaFemina believes that BHP Group is the best choice out of the mining group as the industry continues to recover from the onset of COVID-19.

He states that BHP’s valuation is attractive after the company’s divestment of BMC  and coal assets, and should push valuation higher.

STA Research(stocktargetadvisor) has a average target of $55, and a consensus Strong Buy rating. STA’s  view of the stock is Slightly Bullish with a score of 5.8 out of 10, where 0 is very bearish and 10 very bullish

 
What to like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Superior capital utilization
The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.
Superior return on assets
The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Superior Earnings Growth
This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

 
What to not like:
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Overpriced on cashflow basis
The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Highly leveraged
The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and
management statements. Sometimes this is high because the company is trying to grow aggressively.
Low Revenue Growth
This stock has shown below median revenue growth in the previous 5 years compared to its sector

Disclaimer : Stock Target Advisor is not a broker/dealer, investment advisor or a platform for making stock buying or selling decisions. Our goal is to democratize and simplify financial information through automated analysis, aggregation of stock information and education in order to help investors with their own research. No content in our site, blogs or newsletters constitutes – or should be understood as constituting – a recommendation to enter in any securities transactions or to engage in any of the investment strategies presented in our site content. We also cannot guarantee the accuracy of any information presented on our site and in our analysis.

 

Leave a Reply

Your email address will not be published. Required fields are marked *