BHP Group Ltd (ASX: BHP) shares will be on watch next week when the mining giant releases its FY 2023 results.
Ahead of the release, let's take a look to see what the market is expecting from the Big Australian on 22 August.
BHP FY 2023 results preview
Due to weaker commodity prices and higher costs, the market is expecting BHP to post a decline in revenue and earnings in FY 2023.
On the top line, the consensus estimate is for revenue to fall 16.5% to US$54,363 million. This comprises the following:
- Copper revenue down 4% to US$16,182 million
- Iron ore revenue down 18.75% to US$24,997 million
- Coal revenue down 28.2% to US$11,171 million
- Other revenue down 6.3% to US$2,063 million
What about earnings?
Unfortunately, BHP's earnings are expected to fall at a quicker rate. The consensus estimate is for underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to fall 20% to US$28,072 million. This comprises:
- Copper EBITDA down 23% to US$6,525 million
- Iron ore EBITDA down 36.5% to US$16,678 million
- Coal EBITDA up materially to US$4,853 million
- Other EBITDA negative US$49 million
On the very bottom line, BHP's earnings per share is expected to come in at US$2.72.
The market believes this will allow the miner to reward its shareholders with an FY 2023 dividend of US$1.72 (A$2.77) per share.
Are BHP shares a buy?
A number of brokers are positive on the Big Australian and have the equivalent of buy ratings on its shares.
For example, Goldman Sachs currently has a buy rating and a $45.60 price target on BHP's shares, whereas Morgans has an add rating and a $51.30 price target on them.
The latter implies a potential upside of almost 18% for investors over the next 12 months.
