Buy, hold, sell: BHP, CBA, and Rio Tinto shares

The team at Morgans has been busy this week updating its views on three of the biggest names on the Australian share market.

Does it rate them as buys, holds, or sells? Let’s find out what the broker is saying about them:

BHP Group Ltd (ASX: BHP)

Morgans was pleased with BHP’s performance during the fourth quarter, highlighting that its operational performance was better than it was expecting.

However, due to its valuation and concerns that the market is too optimistic on BHP’s copper prospects, Morgans only has a hold rating and $60.20 price target on its shares. It said:

A good end to FY26 for BHP, with an operational result largely in line with consensus and a touch ahead of our estimates in places. Normally a source of volatility, BHP’s coal operations posted decent consensus beats at both BMA and NSWEC. FY27 guidance looks steady versus our existing estimates, although consensus does look high on group copper. Best-in-breed global diversified miner in what remains a healthy upcycle for resources. We maintain our HOLD rating and A$60.20 target price.

Commonwealth Bank of Australia (ASX: CBA)

The broker has been looking at banking giant CBA ahead of its results next month. Unfortunately, it continues to think that its valuation is stretched and has retained its sell rating on CBA shares with a trimmed price target of $117.63. It commented:

We make updates to our forecasts ahead of the FY26 result in August. Net result is 1-2% downgrades to FY27-28F EPS. 12 month target price reduces 1% to $117.63. Sell retained, given stretched valuation metrics remain implied in the share price (c.26x PER, 3.7x PBV, 2.9% cash yield).

Rio Tinto Ltd (ASX: RIO)

Finally, Morgans was also pleased with Rio Tinto’s performance in the last quarter, noting that Pilbara iron ore shipments were stronger than expected and its copper cost guidance has been trimmed.

However, with Rio Tinto shares rising strongly over the past 12 months, the broker has retained its hold rating with a $163.00 price target. It explains:

RIO posted a healthy Q2 where it matters, with Pilbara shipments beating consensus (+2%), while we see the headline Simandou miss (-68% vs consensus) as a net positive: a slower Simandou ramp supports iron ore benchmarks, and each US$10/t on the benchmark is worth ~US$2.5bn of annual EBITDA to RIO’s far larger Pilbara business. The sting in the tail was Kennecott, with a late June converting furnace breach requiring a ~75-day full rebuild, hitting H2 refined copper and gold output (total copper including saleable matte unchanged).

Copper C1 guidance halved to US30-50c/lb, on strong by-prod prices, a material margin tailwind into the H2 result. Trading back close to where we see fair value, RIO remains one of the highest quality global exposures to a sector enjoying a multi-year upcycle (albeit not without its volatility). We maintain our HOLD rating, A$163.00 TP (was A$165.00).

The post Buy, hold, sell: BHP, CBA, and Rio Tinto shares appeared first on The Motley Fool Australia.

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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 recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.