BHP Group Ltd (ASX: BHP) has been a solid performer on the ASX 200 in 2021, with the BHP share price rising over 13% so far this year.
After a solid first half to the year, investors will no doubt be keen to discover where analysts think the BHP share price will go from here.
What are leading brokers saying about the BHP share price?
Although the BHP share price is currently up 13% in 2021 to $48.73, a number of leading brokers believe it can still go higher.
Chief among them are the analysts at Goldman Sachs. A recent note out of the investment bank reveals that the broker has a buy rating on its shares. Furthermore, Goldman's BHP share price target of $53.80 implies potential upside of 10.5% before dividends over the next 12 months.
And thanks to the strong free cash flow the mining giant is generating from favourable commodity prices, Goldman is very positive on the BHP dividend in 2021. It is estimating a fully franked dividend of $3.10 per share, which represents a very attractive 6.4% yield currently.
Goldman commented: "We retain our Buy rating on BHP on: (1): Strong earnings growth and FCF: We forecast a c. 50% increase in EBITDA and a doubling of FCF in FY21 (equating to c. 10-11% FCF yield), driven by our positive view on met coal, copper and oil prices. (2) Strong production growth: BHP's group Cu Eq production should increase by 4-5% in FY22 and 6-7% in FY23, driven by a +250-270kt lift in copper volumes from Spence and Escondida, +10MMboe of oil volumes with new production from Mad Dog II/Atlantis Phase 3/Shenzi."
Who else is positive on BHP?
Another broker that is bullish on the BHP share price is Macquarie. Its analysts have an even higher BHP share price target of $63.00. This represents potential upside of over 29% for BHP shares over the next 12 months.
And like Goldman Sachs, Macquarie is expecting the BHP dividend in 2021 to be very generous. It has pencilled in a fully franked $4.08 dividend per share, which equates to a massive 8.4% yield.
Macquarie notes that BHP's iron ore operations are generating material free cash flow at current spot prices. It is expecting this to support solid shareholders cash returns in the near term.
UBS is sitting on the fence
One leading broker isn't as positive, though. Analysts at UBS currently have a neutral rating and $42.00 BHP share price target. This implies potential downside of almost 14% over the next 12 months.
While it sees positives from potentially strong cash returns, it does have concerns over risks to the iron ore price. It suspects that a recovery in Brazilian supply and slowing Chinese demand could weigh on prices.
Nevertheless, the broker doesn't expect this to stop BHP from paying a big dividend in 2021. It is forecasting a fully franked dividend of $3.58 per share, which represents a 7.3% yield.
