The BHP Group Ltd (ASX: BHP) share price was a positive performer on Tuesday.
The mining giant’s shares rose almost 3% to close the day at $47.00.
This leaves the BHP share price trading within touching distance of its record high of $47.54.
Why did the BHP share price push higher today?
Investors were buying BHP shares on Tuesday following the release of a solid half year result. For a deeper dive into its result, you can read about it here.
For the six months ended 31 December, the mining giant posted a 15% increase in revenue to US$25.64 billion and a 21% jump in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to US$14.7 billion. The latter was driven by a 3-percentage point expansion in its operating margin to 59%.
The Big Australian also reported strong growth in its free cash flow and its dividend.
BHP’s free cash flow increased 39% over the prior corresponding period to US$5.2 billion. This allowed the BHP board to increase its interim dividend by 55% to a fully franked US$1.01 per share (~A$1.30 per share).
How does this compare to expectations?
According to a note out of Goldman Sachs, BHP’s underlying EBITDA was 1% ahead of its forecast.
It notes that this was driven by EBITDA beats from oil and copper, which offset softer than expected iron ore and coal earnings.
Also coming in ahead of its expectations was BHP’s dividend. The broker was only expecting an 82 U.S. cents per share interim dividend, compared to its actual interim dividend of US$1.01 per share.
Another positive was its lower than expected net debt. Goldman notes that BHP’s net debt was US$11.8 billion at the end of December. This compares to the broker’s estimate of US$12.8 billion.
Is the BHP share price in the buy zone?
Goldman Sachs still sees a little bit of upside left in the BHP share price. It currently has a buy rating and $47.80 price target.
Though, this price target could change in the coming days once the broker has had time to fully digest the result. Stay tuned for that.
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More reading
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- BHP (ASX:BHP) share price higher after huge first half profit and dividend growth
Motley Fool contributor James Mickleboro 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 Bruce Jackson.
The post Here’s why the BHP (ASX:BHP) share price is closing in on its record high appeared first on The Motley Fool Australia.
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