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Investing.com - Deutsche Bank (ETR:DBKGn) has lowered its price target on BHP (BHP:LN) (NYSE:BBL) to GBP18.50 from GBP19.00 while maintaining a Hold rating on the mining giant’s stock. The company maintains a "GREAT" financial health score according to InvestingPro data, with a strong current ratio of 2.47 and an impressive Altman Z-Score of 11.04.
The price target reduction follows negative investor reaction to BHP’s plans for substantial investments in its copper business, according to Deutsche Bank’s research note.
Deutsche Bank expects BHP’s upcoming results presentation to focus on capital expenditure phasing and efforts to keep spending levels close to the company’s fiscal year 2026/2027 guidance of approximately $11 billion annually.
The research firm acknowledged that BHP is entering a more investment-intensive period, creating a trade-off between delaying projects and delivering volume growth in its operations.
Deutsche Bank’s analysis suggests that when factoring in potential project approvals over the next two to three years, including BHP’s 50% share of the equity-accounted Vicuna joint venture, capital expenditure could exceed $12 billion annually within that timeframe.
In other recent news, Berenberg has downgraded BHP’s stock rating from Hold to Sell. The downgrade reflects concerns over BHP’s capital allocation, with the firm noting that the company’s capital expenditure has increased structurally. Berenberg maintains a price target of GBP17.00, suggesting a potential downside of 16% from BHP’s previous closing price. The investment firm highlighted several unapproved projects that could further strain BHP’s spending in the medium term. This development adds to the ongoing scrutiny of BHP’s financial strategies. Investors are advised to consider these recent assessments as they evaluate BHP’s stock.
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