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Investing.com - BHP Billiton (NYSE:BBL) Ltd. (NYSE:BHP) has been downgraded from Outperform to Neutral by Macquarie on Friday, despite the firm raising its price target to GBP41.00 from GBP40.00.
The mining giant reported fourth-quarter fiscal year 2025 results that exceeded expectations on most metrics, with fiscal year 2026 guidance aligning with market consensus. The company’s fiscal year 2025 unit cost commentary remained consistent with previously issued guidance.
Macquarie cited concerns about cost overruns at BHP’s Jansen potash project as a key factor in the downgrade, noting that the "Jansen’s S1 cost blow out casts a shadow on future execution risk." The firm acknowledged that the deferral of the Stage 2 expansion (S2) was "prudent" as it protects returns from Stage 1.
The research firm adjusted its earnings per share estimates for BHP, raising fiscal year 2025 projections by 4% while reducing fiscal year 2026 estimates by 6%. The Jansen Stage 2 deferral is expected to reduce earnings per share by 1-2% from fiscal years 2028 through 2030.
Macquarie’s downgrade to Neutral reflects its projection of only a 5% total shareholder return for BHP, despite increasing its target price by 2% to A$41 per share.
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