The BHP Group Ltd (ASX: BHP) share price is edging higher on Friday.
In afternoon trade, the mining giantâs shares are up a fraction to $45.80.
Where next for the BHP share price?
With a new year upon us, investors may be wondering where the BHP share price is heading next.
With that in mind, I thought I would take a look to see what analysts are saying about the Big Australianâs shares at current levels.
And, as you might have guessed, after a strong showing in 2022, (see below) opinion is quite divided on the mining giant now.
What are brokers saying?
Most brokers are sitting on the fence with hold and neutral recommendations.
Morgans, for example, downgraded the minerâs shares to a hold rating with a $44.80 price target earlier this month. This is largely in line with where its shares trade today.
The broker explained that the downgrade was made on valuation grounds. It said:
We can certainly see the potential green shoots for a recovery in demand drivers for steel, but it is also not hard to see a fresh bout of volatility before that recovery takes hold. We view current share prices on our large-cap iron ore miners as suggesting we have to âpay up frontâ for that potential recovery, leaving us with lower conviction. As a result we downgrade our rating on BHP and RIO to HOLD (from ADD), while maintaining a REDUCE on FMG.
UBS went one step further and downgraded the miner’s shares to a sell rating with a $40.00 price target a couple of weeks ago. It said:
The macro backdrop is still fragile with global growth slowing and Chinaâs reopening challenging in winter, iron ore fundamentals are still weak, and the stock is expensive at normalized commodity prices with free cash flow yield less than 5% at $80/ton iron ore and $180/ton met-coal.
The lone bull
As far as Iâm aware, the lone bull at present is Macquarie with its outperform rating and $50.00 price target. This implies potential upside of approximately 9% for investors in 2023.
Macquarie likes BHP due to its belief that current iron ore prices could lead to the mining giant outperforming estimates in FY 2023. The broker is also expecting a generous 6%+ dividend yield next year to sweeten the deal further.
Time will tell which brokers make the right call.
The post What are brokers saying about the BHP share price in 2023? appeared first on The Motley Fool Australia.
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More reading
- The 5 biggest threats to the stock market in 2023
- Iron ore price in 2023: Bull vs. bear
- Better buy for 2023: BHP vs. Fortescue shares
- 3 ASX shares that could benefit from a predicted copper price boom next year
- 5 things to watch on the ASX 200 on Wednesday
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.
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