The BHP Group Ltd (ASX: BHP) share price is on course to end the week in the red.
The mining giant's shares are currently down 1% to $40.33.
Despite this, the BHP share price is still up a sizeable 4.5% week to date.
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Can the BHP share price keep rising?
One leading broker that believes the BHP share price is about fair value now is Goldman Sachs.
According to a note, its analysts have retained their buy rating with a $40.50 price target. This is broadly in line with where its shares are trading at present.
However, the broker continues to forecast generous dividend yields from the Big Australian's shares in the coming years, which may explain why it has stuck with its buy rating.
Goldman estimates fully franked dividend yields of approximately 6.3% in FY 2023, 6% in FY 2024, and 5.5% in FY 2025. The broker commented:
From a FCF/DPS perspective, BHP is trading on an attractive FCF/DPS yield of c.5% in FY23-25. We were modeling ~US$9bn by mid-decade and have increased this to ~US$10bn. The higher capex supports our already modeled reduction in the dividend payout ratio from ~80% to 60% to fund organic growth.
Macquarie sees upside potential
While Goldman Sachs may believe the BHP share price is close to being fully valued now, the team at Macquarie don't agree.
According to another note, this morning the broker retained its outperform rating and $45.00 price target on its shares.
This implies potential upside of 11.5% for investors over the next 12 months. And like Goldman, its analysts are expecting a ~6.3% dividend yield in FY 2024.
However, unlike Goldman, Macquarie expects the BHP dividend to grow in FY 2024 and is forecasting a yield in the region of 7.5%.
This could make BHP one to consider if you're looking for mining sector exposure.
