BHP shares hit 52-week low! Here's what brokers say will happen next

BHP shares are now the same price as they were in January 2020.

| More on:
Piggy bank sinking in water symbolising a record low share price.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's been a bouncy yet pleasant day overall for the S&P/ASX 200 Index (ASX: XJO) and many ASX 200 shares so far this Thursday. At the time of writing, the ASX 200 has gained a decent 0.29% and is up to around 7,870 points. But unfortunately, those 'many ASX shares' don't include BHP Group Ltd (ASX: BHP).

This ASX 200 blue-chip stock and mining giant is having an awful day; there's no way around it. BHP shares closed at $39.62 each yesterday, but those same shares are currently down a chunky 1.1% at $39.18 today. Moreover, the BHP share price hit a new 52-week low of $38.76 just before midday. 

This is just the latest drop in what has been a horrid year for the miner. At the present pricing, BHP is now nursing a nasty loss of 22.5% year to date, including a 10.3% collapse over the past month alone. The 'Big Australian' is now back to the same share price it was trading at way back in January 2020.

Check that all out for yourself below:

It's not too difficult to understand why BHP has been having a rough time over the past few months. For one, the prices of its major commodity – iron ore – have declined dramatically this year. As my Fool colleague Tristan discussed today, iron ore has gone from around US$140 a tonne at the start of 2024 to approximately US$100 a tonne today.

The pain doesn't look like it will ease anytime soon either, with demand from the key iron export market of China precipitously dropping.

News this week of a potentially damaging worker strike at one of BHP's largest copper mines – Chile's Escondida – hasn't exactly helped boost confidence either.

What's next for BHP shares?

With all of this bad news sparking the new 52-week lows for BHP shares that we are seeing this week, many investors might be wondering what's next for the miner. Could we see BHP sink even lower from here?

Well, anything is possible on the stock market. But one ASX expert who thinks this low share price represents a buying opportunity is broker Goldman Sachs.

As my Fool colleague covered just yesterday, Goldman has recently come out with a bullish outlook on BHP. The broker gave the miner a 'buy' rating, alongside a 12-month share price target of $48.40. If that is realised, it would see investors enjoy an upside of more than 23% from the current BHP share price.

Goldman cited BHP's "strong free cash flow generation" as a reason for its confidence in the miner right now, arguing that it justifies a "premium valuation". That's largely thanks to the free cash flow advantage from every tonne of iron ore mined in the Pilbara region of Western Australia over its peers.

Investors will no doubt be happy to hear this news this week as BHP sinks to its new 52-week low. But let's wait and see what happens with the BHP share price going forward.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

How could this iron ore forecast impact BHP shares?

Here’s what could happen next for the iron ore miners.

Read more »

A boy stands firm on a rocky cliff holding a rocket in each hand and looking up toward the sky, anticipating flying into space.
Resources Shares

Up 864% in a year, how this ASX mining stock is primed to keep rocketing in 2025

The ASX mining stock looks to be in a sweet spot amid export bans from China and Russia.

Read more »

Miner looking at a tablet.
Resources Shares

2 small-cap ASX mining shares exploding 40%+ on China tariff news

Investors are sending the small-cap ASX mining shares flying higher on Wednesday.

Read more »

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Why are ASX mining shares falling this week?

The tumultuous start to the week for mining shares could be a sign of things to come. 

Read more »

Three miners looking at a tablet.
Resources Shares

Did you catch what happened with the BHP share price in January?

BHP shares saw plenty of trading action in January.

Read more »

Man standing in a mine with mining vehicles.
Resources Shares

Sayona Mining share price charging higher on 33% revenue boost

ASX investors are reacting very positively to Sayona Mining’s December results.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Resources Shares

How does the Fortescue dividend yield compare to other ASX mining shares?

Fortescue typically pays excellent dividend yields, but can it do so again in 2025?

Read more »

Miner looking at a tablet.
Resources Shares

Forget gold! Why this soaring ASX silver share is still trading at 'good value' today

A leading expert has a bullish outlook on this rocketing ASX silver miner.

Read more »