Australian mining giant BHP Group Limited (BHP) has hit a six-year low in profits, primarily due to falling iron ore prices. The company also reduced its dividend to 50 cents per share, the lowest since 2017. Despite this short-term setback, BHP’s leadership is confident that recovering steel and copper demand will restore profitability and shareholder value in the coming years. As a result, BHP stock gained over 1.5% in the pre-market trading today.
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Copper and Steel Demand Set to Drive BHP’s Future Growth
As the green energy transition gains momentum, copper demand is set to rise, driven by its growing use in electric vehicles (EVs) and renewable energy infrastructure. BHP’s copper assets, including the massive Escondida mine in Chile, are set to capitalize on this growing trend.
Similarly, the company is optimistic about steel demand, thanks to China’s economic stimulus and rising global infrastructure projects.
These factors are expected to revive the steel market, benefiting BHP’s portfolio and further diversifying its revenue stream.
Is BHP Currently a Good Buy?
According to TipRanks’ consensus, BHP stock has been assigned a Moderate Buy rating, backed by three Buy and three Hold recommendations. The BHP share price target is $52.20, which is 1.26% above the current trading price.
