BHP Group (ASX: BHP) shares and other mining majors outpaced the S&P/ASX 200 (ASX: XJO) index in October. And now analysts at Macquarie Group Ltd (ASX: MQG) have updated their price target on the five mining giants.
At the time of writing on Tuesday afternoon, the index, and most of the top 200 shares listed on it, have slipped into the red following the Reserve Bank's cash rate announcement for November. The Reserve Bank held the interest rate on hold at 3.6% for another month.
At the time of writing, BHP shares are down 1.59% to $42.67 a piece. For the month the shares are 1.84% higher.
Meanwhile, Rio Tinto Ltd (ASX: RIO) shares are down 2.49% today at $129.54, but 4.81% higher over the past month.
Fortescue Ltd (ASX: FMG) shares are also down today. At the time of writing the share price has slipped 3.68% to $20.28 a piece. Over the month the shares are 4.13% higher.
Likewise, South32 Ltd (ASX: S32) shares are down 2.7% for the day to $3.065, at the time of writing. It has wiped some gains off the miner but its share price has still spiked 9.07% over the past month.
Mineral Resources Ltd (ASX: MIN) shares are also down 2.21% to $46.08, at the time of writing. Like South32 the shares have spiked 12.33% over the past month.
For context, the ASX 200 index is down 0.59% at the time of writing and down 1.45% over the month.
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Macquarie's price target on the shares
The broker has a neutral outlook on BHP shares and a $44.00 target price. At the time of writing that represents a potential upside of 3.1% for investors over the next 12 months.
Macquarie also has a neutral outlook on Rio Tinto shares and a $124 target price. That's a potential 4.5% upside over the next 12 months, using the share price at the time of writing.
Macquarie has an underperform rating on Fortescue shares and a $18.50 target price. That represents a 8.8% downside for investors, at the time of writing.
South32 shares have also been dealt an underperform rating, with a $3.20 target price. That's a potential 4.4% upside over the next 12 months, using the current trading price.
Mineral Resources is also expected to underperform. The broker has a $38.00 target price on its shares which, at the time of writing, represents a potential 17.5% downside.
What did the broker have to say about BHP and the other ASX 200 miners?
Macquarie said spot prices are higher versus its estimates for CY26. Iron (Fe) is +30%, Copper (Cu) is +8%, Thermal is +15% and spodumene (Spod) is +11%. Rare Earths are lower (-24%).
Macquarie said that diversified miners are performing strongly under spot price conditions, particularly due to higher iron ore prices.
The broker wrote:
FMG under spot would enjoy ~120% upside to NAV versus MQe, while both BHP and RIO would also enjoy ~60% upside. EBITDA for BHP/RIO/FMG would improve by 27%/31%/48% over CY26E, respectively. We note FMG's latest mine plan, which lowered grades, enabling access to lower strip ore, was positive for our NAV (via lower C1 costs). The more resilient/lower cost base (despite marginal VIU product discounts) sees FMG's sensitivity to spot reduce.
