BHP Group Limited (BHP) reaffirmed its FY25 guidance after reporting strong production output in the first half. The company remains on track to achieve production at the upper end of its FY25 guidance for most of its assets. However, it lowered its production target for Copper South America due to a weather-related power outage.
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BHP is a global mining company with a diverse portfolio that includes commodities such as iron ore, coal, copper, nickel, etc.
BHP Reports Strong Production Numbers
In the first half of FY25, BHP reported a 10% year-over-year growth in copper production, reaching 987,000 tonnes across all copper operations. This was mainly driven by a 22% output increase at its Escondida mine in Chile. Meanwhile, the average realized copper price climbed 9% to $3.99 ($6.36) per pound.
BHP also highlighted its recent collaboration with Canadian company Lundin Mining (LUNMF) (TSE:LUN) to form a joint venture, Vicuña Corp. The venture will speed up work on the Filo del Sol and Josemaria copper projects in Argentina and Chile, which are hailed as one of the most important copper discoveries in decades. This further strengthens BHP’s copper portfolio and aligns with its strategy to leverage rising demand for the metal driven by the energy transition.
Speaking of iron ore, production rose 1% year-over-year to 131 million tonnes, while the average realized price per wet metric tonne dropped 22% to $81.11.
RBC Weighs in on BHP’s Performance
Analyst Kaan Peker from RBC Capital Markets praised the company’s operational performance in the second quarter, even though major assets were affected by heavy rain, power outages, and strikes. In Q2, copper production rose by 17%, while iron ore increased by 1% compared to Q2 FY24.
On the other hand, Peker pointed out that the realized prices for copper and iron ore were lower than expected, which is likely to impact the earnings forecasts from analysts. Peker has a Hold rating on BHP stock.
Is BHP Currently a Good Buy?
According to TipRanks’ consensus, BHP stock has been assigned a Moderate Buy rating, backed by three Buy and two Hold recommendations. The BHP share price target is $51.25, which is 2.32% above the current trading price.
