The BHP Group Ltd (ASX: BHP) share price is slightly down in the 2023 year to date, but the ASX mining share has seen plenty of volatility, as illustrated in the chart below.
As the biggest business on the ASX, it gets a lot of market attention. There are numerous analysts that have a view on the business, so let's have a look at whether investors are positive on the business or not.
Analyst ratings on the BHP share price
Commsec collates a number of different recommendations about different ASX shares. For BHP, there are a total of 26 ratings on the company.
Of that total, there are nine buy ratings, 11 hold ratings and six sell ratings.
So, the most popular rating is a hold, however there are more buys than sells, so analysts are mixed but a little more positive than negative.
What's going on?
The latest quarterly update from the business showed how it performed operationally.
In the three months to 31 March 2023, compared to the three months to 31 December 2023, copper production of 405.9kt was down 4%, iron ore production of 59.8mt was down 11%, metallurgical coal production of 6.9mt was flat, energy coal production of 3.9mt was up 38% and nickel production was up 11%.
However, year over year, quarterly copper production was up 10%, iron ore production was flat, metallurgical coal production was down 13%, energy coal production was up 53% and nickel production was up 5%.
Changes in resource prices can affect investor sentiment about the BHP share price because it changes how much profit the business is able to make.
Mining costs don't change much month to month, so any extra revenue is largely a boost for profit as well. A fall in the resource price can have the opposite effect, it hurts the profitability.
The iron ore price has fallen from its peak, earlier in the year of approximately US$130 per tonne. But, it's up from the low of below US$100 per tonne.
BHP's iron division has made massive profits over the last couple of years, but the lower price may well be enough for it to keep making good enough profits to pay appealing dividends.
BHP said regarding its outlook:
Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand, with China's economic rebound and solid momentum in India's steelmaking growth helping to offset the impact of slowing growth in the US, Japan and Europe.
The ASX mining share now owns OZ Minerals, a copper and nickel miner. BHP stated:
We look forward to building an internationally competitive copper business in South Australia and incorporating West Musgrave into our nickel options in Western Australia. We are pursuing growth options in copper and nickel globally – we aim to have up to 10 drill rigs on the ground at Oak Dam in South Australia in the next few months and have seen promising results from a potential new copper prospect in Arizona.
Dividend forecast and valuation of the BHP share price
According to the forecast on Commsec, BHP shares are valued at under 11 times FY24's estimated earnings with a possible FY24 grossed-up dividend yield of 8.4%.
