The BHP Group Ltd (ASX: BHP) share price is edging higher on Wednesday.
In early afternoon trade, the mining giant's shares are up 0.5% to $37.35.
This compares favourably to the performance of the ASX 200 index, which is down 0.5% this afternoon.
Why is the BHP share price outperforming?
The catalyst for the rise in the BHP share price on Wednesday appears to have been a bullish broker note out of Macquarie.
According to the note, the broker has retained its outperform rating and lifted its price target on the company's shares to $44.00.
This implies a potential return of almost 18% for investors over the next 12 months before dividends.
And if you include the fully franked 7% dividend yield that the broker is expecting in FY 2023, the total return on offer with BHP's shares lifts to approximately 25%.
The note reveals that Macquarie has been looking at thermal coal prices and expects them to remain higher for longer due to supply constraints. This has led to the broker upgrading its earnings estimates for BHP by around 5% per annum through to FY 2026.
What else is happening?
In other news, BHP has revealed that it has given notice to the holders of some hybrid notes that it will exercise its contractual option to redeem and cancel them. These notes, with a value of 600 million pounds, were due to expire in 2077.
The company made the move in accordance with its group strategy and strong liquidity position.
