The BHP share price is sliding 5% today. Is it time to dig in?

It’s a rough day on the market for the Big Australian.

| More on:
a female miner looks straight ahead at the camera wearing a hard hat, protective goggles and a high visibility vest standing in from of a mine site and looking seriously with direct eye contact.

Image source: Getty Images

Key points

  • The BHP share price is in the red today 
  • Other ASX mining giants are also having a tough day 
  • However, some analysts are optimistic about the outlook for the BHP share price

The BHP Group Ltd (ASX: BHP) share price is in the red today, but could it be a buy in the future?

BHP shares are currently swapping hands at $44.74, a 3.18% fall. Earlier in the session, the BHP share price dropped as low as $44.11, or 4.5% lower.

For perspective, the S&P/ASX 200 Index (ASX: XJO) is 1.47% in the red at the time of writing.

Let’s take a look at what is happening to the BHP share price.

What’s the outlook for BHP?

BHP is not the only ASX mining giant dropping today. The Fortescue Metals Group Ltd (ASX: FMG) share price is 3.41% in the red today, while Rio Tinto Ltd (ASX: RIO) is descending 3.64%. Iron ore prices have fallen nearly 6% to US$128 per tonne, Trading Economics data shows.

However, Macquarie is predicting BHP shares could be ready for re-rating after the company’s petroleum demerger. In comments quoted by The Australian, Macquarie associate director Hayden Bairstow said:

We believe BHP’s EV/EBITDA multiples could expand after the petroleum demerger.

Further, we believe there is potential for BHP to command a re-rating given the portfolio would be oil and gas free post the demerger, a hurdle that has suppressed interest in BHP due to strict ESG mandates.

BHP has agreed to offload its petroleum business to Woodside Petroleum Ltd in exchange for Woodside shares. This is earmarked for completion by 1 June, subject to the approval of Woodside shareholders at a meeting on 19 May.

Analysts at Morgans are also optimistic about the BHP share price, as my Foolish colleague James reported. The company has an add rating on BHP shares and a $54.30 price target.

Morgans analysts said:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. 

BHP share price snapshot

The BHP share price has descended 13% in the past year while it has jumped more than 8% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has lost 2% over the past year.

BHP has a market capitalisation of about $228 billion based on the current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Female South32 miner smiling with mining machinery in the background.
Resources Shares

Iluka share price lifts off on rare earths refinery progress

The Western world is keen to secure rare earths supplies outside of China.

Read more »

An analyst wearing a dark blue shirt and glasses sits at his computer with his chin resting on his hands as he looks at the CBA share price movement today
Broker Notes

Down 18% in a month, is the Piedmont Lithium share price a buy?

The share has been beaten down lately.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

How big will the South32 dividend be in 2023?

Where is the South32 dividend heading?

Read more »

a man dressed in a green superhero lycra outfit stands in a crouched pose with arms outstretched as if ready to spring into action with a blue sky and oil barrels lying in the background.
Resources Shares

‘I don’t know of a better industry to be pivoting towards’: Twiggy talks up hydrogen play amid soaring fuel costs

The current environment of rising energy costs could make hydrogen a better play.

Read more »

Happy man in high vis vest and hard hat holds his arms up with fists clenched celebrating the rising Fortescue share price
Resources Shares

Fortescue share price rebounds 3% today

Fortescue's shares are rebounding on Tuesday...

Read more »

A Rio Tinto miner in hardhat and high visibility clothing makes a thumbs up symbol against a blue sky.
Resources Shares

Fortescue’s Twiggy adamant there’s ‘not a snowflake’s chance in hell’ of recession

Global aggregate demand appears strong, according to Twiggy.

Read more »

New Hope share price ASX mining shares buy coal miner thumbs up
Resources Shares

Why are ASX 200 coal shares having such a smoking session today?

The energy crisis in Europe may be firing ASX coal shares today.

Read more »

a group of three men in hard hats and high visibility vests stand together at a mine site while one points and the others look on with piles of dirt and mining equipment in the background.
Resources Shares

Why is the Core Lithium share price slipping today?

The Australian lithium company has reported its progress to the market today.

Read more »