BHP Group Ltd (ASX: BHP) shares are trading higher on Wednesday.
In afternoon trade, the mining giantâs shares are up 2.5% to $46.39.
Investors have been piling into the resources sector today following the release of strong economic data out of China.
According to CNBC, Chinaâs official manufacturing PMI hit 52.6 in February, which is above the 50-point mark that separates growth from contraction. Importantly, it is also the highest reading since April 2012, when the manufacturing PMI hit 53.5.
Should you buy BHP shares at $46?
In light of the above, investors may be wondering if BHP shares are good value at $46.00.
Unfortunately, opinion remains divided on the mining giant at the current level.
Goldman Sachs, for example, sees modest upside for the Big Australian’s shares and has a neutral rating and $48.00 price target. It commented:
BHP is currently trading at ~6x NTM EBITDA vs. global peers (including RIO, GLEN & AAL) at ~5x EBITDA, and at ~1.1x NAV vs. RIO at ~0.9x NAV. Although we believe this premium vs. peers can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore), high returning copper growth, and lower iron ore replacement & decarbonisation capex, we highlight potential downside to our PT of A$48.0/sh.
However, over at Macquarie, its analysts are far more positive and see plenty of value in the BHP share price.
Last week, the broker put an outperform rating and $52.00 price target on its shares. This implies potential upside of 12% over the next 12 months.
In addition, the broker is expecting a ~$2.66 per share fully franked dividend in FY 2023. This equates to a 5.7% dividend yield, which stretches the total potential return to almost 18%.
Time will tell which broker makes the right call.
The post Should I buy BHP shares at $46? appeared first on The Motley Fool Australia.
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More reading
- Why did the BHP share price tumble 9% in February?
- Own BHP shares? Hereâs how the ASX 200 miner is cutting emissions
- Why are ASX 200 mining shares ending the week in the red?
- Brokers name 3 ASX shares to buy now
- Could this send the BHP share price rocketing to all-time highs?
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.
from The Motley Fool Australia https://www.fool.com.au/2023/03/01/should-i-buy-bhp-shares-at-46/
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