The BHP Group Ltd (ASX: BHP) share price has tumbled further in early-morning trade on Wednesday as conflict in the Middle East continues to put pressure on energy and commodity markets, and investor sentiment softens.
At the time of writing, the shares are down 4.33% to $5.20 a piece. It's the second consecutive loss. The shares closed 2.62% lower yesterday afternoon.
Despite the drop, the BHP share price is still 20.59% higher for the year to date and 39.79% above where it was a year ago.
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What has happened?
The miner reported impressive half-year earnings last month, prompting investors to flock to the stock. On the bottom line, the ASX 200 miner achieved a 22% increase in underlying profit to US$6.20 billion. This saw management declare a fully-franked interim dividend of 73 US cents (AU$1.03) a share, up 30% in Aussie dollar terms and up 46% in US dollar terms.
The company's share price hiked nearly 18% between the announcement and the close of the ASX on Friday last week. It's likely that some softening in the share price this week is due to cooling investor interest following the sharp uptick.
At the same time, soaring geopolitical uncertainty as the US and Israeli war against Iran continues to intensify, is also frightening investors. The Middle East Conflict has boosted the US dollar and dampened demand expectations for commodities. Generally, a stronger US dollar tends to make US-dollar-priced commodities less attractive, which can dent the share prices of miners, such as BHP.
Meanwhile, to add to this week's headwinds, there have been recent reports that BHP Queensland mines can no longer compete for investment and that the company is receiving no returns from the projects. The update will raise more concern for investors about the company's outlook.
What's next for the BHP share price?
TradingView data shows that the majority of analysts still have a hold rating on BHP shares. Of 20 analysts, 11 rate the mining giant's stock as a hold, and 7 have a buy or strong buy rating. Another two have a sell or strong sell rating on BHP shares. This is an improvement from last month, when three analysts had a sell rating on the stock.
The average target price is currently $52.74 per share, which, after the latest rally, implies a 4.74% downside at the time of writing.
Although some analysts are bullish that the shares could climb 22.73% to $67.95 a piece this year. And others think the stock could shed 35.95% and tumble to $35.46.
Many of the target prices have been raised over the past week. Late last month, Jason Fairclough of Bank of America put a 12-month price target of $68 on BHP shares, up from $57 previously.
Citi also updated its price target, lifting it from $49.60 to $53.41 while keeping a hold rating. As did Barclays, which lifted its target to $52.84 and maintained its hold rating.
