The BHP Billiton Limited (ASX: BHP) share price has fallen 1.8% to $24.50 this morning as the iron ore price retreated 3.1% overnight to US$68.10 a tonne.
This week BHP reported that total iron ore production hit a record 231 million tonnnes for FY 2017, which was up 4% over FY 2016. Total petroleum production of 208 million equivalent barrels of oil was down 13% on the prior year, as the group deferred some activity in the U.S. due to soft oil prices over the period.
As a result of the update and guidance for FY 2018 the analysts at UBS reportedly rate BHP shares as a "buy" with a share price target of $28.
The analysts are expecting full year earnings per share of $1.80, which means BHP trades on 13x earnings on its current valuation.
Over FY 2018 UBS is forecasting earnings per share to be flat at $1.83, which reflects BHP's production guidance for the year ahead, although the potential for wild swings in commodity prices means profit forecasts can be unreliable.
BHP also still has to pick up the bill for a US$250 million compensation program it has put in place for victims of the Samarco dam disaster in Brazil, with some US$47.5 billion in public civil claims relating to the failure still to be negotiated and settled.
Over the last five years, BHP shares are down 21% and based on analysts' forecasts it will offer a dividend yield of 4% over FY 2018.
