BHP Group Ltd (ASX: BHP) shares are falling with the market on Thursday.
In afternoon trade, the mining giant's shares are down 1.5% to $45.18.
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Should you buy the dip?
One leading broker that is likely to see today's pullback as a buying opportunity is Goldman Sachs.
This morning, in response to the miner's first-quarter update, the broker has reiterated its bullish view on BHP's shares.
According to the note, its analysts have retained their buy rating and $46.50 price target.
While this only implies a modest potential upside of 3%, the broker expects a 4.2% dividend yield in FY 2024 to sweeten the deal further. It commented:
BHP is currently trading at ~6.0x NTM EBITDA, (25-yr average EV/EBITDA of ~6-7x) vs. RIO on ~5.0x. BHP is trading at 1.0x NAV (A$45.4/sh), vs. RIO at ~0.9x NAV. That said, we believe this premium vs. peers can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t), high returning copper growth, and lower iron ore replacement & decarbonisation capex.
Who else is bullish on BHP shares?
Goldman isn't the only broker with the equivalent of a buy rating on the Big Australian's shares.
In response to the update, Macquarie has retained its outperform rating and $47.00 price target, which suggests an upside of 4%. It continues to forecast a fully franked ~4.5% dividend yield over the next 12 months.
Over at Morgans, its analysts are a touch more bullish and have an add rating and $50.00 price target on the miner's shares.
Combined with its expectation for a ~6% dividend yield in FY 2024, this implies a total 12-month return of almost 17%.
