Key Points
- BHP shares have climbed almost 10% this year following an uptick in iron ore prices
- Broader market index is also surging ahead on the back of positive investor sentiment
- The company's H1 FY22 results are scheduled to be released on 15 February
The BHP Group Ltd (ASX: BHP) share price has been marching upwards in 2022.
At Wednesday's market close, shares in the world's second largest miner finished the day 1.58% higher to $45.64. This means that BHP shares have now gained 9.98% since the start of the year.
What's driving BHP shares higher?
There are a few factors as to why the BHP share price is trading in positive territory this year.
Firstly, the accent of iron ore prices is providing a strong support base for the company's margins thus far in FY22. Regarded as a key commodity in BHP's portfolio, this is particularly important given that a majority of its revenues come from the steelmaking ingredient.
In the financial year ending 30 June 2021, iron ore accounted for 57% of the total group revenue from BHP.
Investors will be keeping a close eye as the company gears up to release its half-year results on 15 February.
In addition, the S&P/ASX 200 Resources (ASX: XJR) index has also pushed ahead, gaining almost 4% in 2022. The sector represents 48 of the largest companies in the S&P/ASX 200 that are members in the energy, metals and mining industry.
A positive shift in investment sentiment toward the index has propelled BHP shares forward.
Lastly, stock markets around the world have regained composure following hope that military tensions between Russia and Ukraine can be resolved. Furthermore, the steady decline of Omicron cases has signalled that the pandemic is nearing an end.
Analysts at UBS updated their outlook on BHP shares yesterday. The broker raised the 12-month price target by 14% to $42 apiece. While this may be slightly lower than the current share price, UBS believes BHP shares are now fully valued.
BHP share price summary
Despite a positive gain of 10% in 2022, the BHP share price is relatively flat over the last 12 months.
Investors heavily sold off the company's shares in August after reaching an all-time high of $54.55. Since then, its shares hit a 52-week low of $35.56, before surging to late August levels of around the $45 mark.
Based on today's price, BHP presides a market capitalisation of roughly $231.04 billion and has approximately 5.06 billion shares outstanding.
